Singapore third-quarter GDP growth softens from four-year high but beats estimates

Key points

• Singapore's third-quarter 2026 GDP growth slowed to 5.4% from a four-year high.
• The figure beat the 5% growth economists polled by Reuters had expected.
• The Monetary Authority of Singapore kept monetary policy steady after two rounds of tightening.

Singapore's economy grew 5.4% in the third quarter of 2026, down from a four-year high in the previous quarter but above the 5% growth economists polled by Reuters had expected.

Government data showed manufacturing declined while construction expanded. Manufacturing accounts for about 20% of the city-state's GDP.

Forecast and policy

In August, Singapore raised its annual growth forecast as AI-related sectors and exports drove the economy past expectations in the first two quarters. GDP growth for 2026 is now expected at 4.5% to 5.5%, up from the previous 2% to 4% range.

The Monetary Authority of Singapore left monetary policy unchanged, pausing after tightening in April and July over inflation risks from higher energy prices. Singapore manages the dollar against a basket of trading-partner currencies rather than using an interest rate.

The Singapore economy should continue to expand at a firm pace in the immediate quarters ahead, and moderate thereafter as the AI cycle eases from its exceptional pace and global financial conditions tighten.

— the Monetary Authority of Singapore

Inflation outlook

The MAS expects inflation to stay high in the near term because of higher energy and food prices, then ease from mid-2027 as import costs fall and domestic price pressures remain subdued.

The MAS said the economy should keep expanding at a firm pace in the immediate quarters ahead, then moderate as the AI cycle eases and global financial conditions tighten.