DBS economist Chua Han Teng highlights that Singapore’s 1Q26 GDP growth was resilient, with real GDP up 4.6% year-on-year, but warns that the Iran war shock and global slowdown pose downside risks. DBS maintains its 2026 real GDP growth forecast at 2.8%, broadly aligned with MAS expectations for the output gap to average around zero as growth slows through 2026.

Firm start but outlook softens

"Singapore’s economy entered 2026 on a firm footing, reflected in resilient real GDP growth of 4.6% yoy and -0.3% qoq sa in 1Q26 (but slower than 5.7% yoy and 1.3% qoq sa in 4Q25), according to MTI’s advance estimates."

"The MAS’s decision also came amid still-resilient near-term economic growth dynamics, but with significant downside uncertainties in the coming quarters."

"We expect this resilience to be tested as the year progresses, with the highly open economy facing renewed geopolitical shocks."

"We maintain our 2026 real GDP growth forecast at 2.8%, but see downside external risks."

"Overall, our Singapore growth expectations appear aligned with the MAS’s view for GDP growth to slow over the course of 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)