DBS forecasts GDP growth of 1.8% as Singapore shows measured resilience

On policy, DBS said authorities are likely to preserve buffers for counter-cyclical action.

DBS forecasts Singapore’s GDP to grow about 1.8% in 2026, close to potential, supported by the country’s position as a trusted financial and business hub, continued digitalisation, and a strong domestic construction pipeline.

DBS expects growth to show “measured resilience” as the economy navigates what it calls the “two Ts” — tariffs and the tech cycle.

Inflation is projected to rebound modestly but remain contained, reflecting fading global disinflation, manageable cost pass-through, and some administrative price increases linked to the green transition.

On policy, DBS said authorities are likely to preserve buffers for counter-cyclical action. After the Monetary Authority of Singapore eased twice in the first half of 2025, DBS’s base case is for policy to remain on hold through 2026 to maintain flexibility.

The bank added that political stability under the fourth-generation leadership supports confidence.

For markets, DBS expects a lower USD/SGD in 2026 and noted that the outperformance of Singapore dollar rates, from a receive perspective, will be difficult to repeat.

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