Singapore: Firm growth despite geopolitical turbulence
Robust 2Q26 growth; Resilience to sustain in 2H26.
Group Research - Econs, Chua Han Teng14 Jul 2026
  • Advance real GDP growth in 2Q26 stayed well above trend at 5.7% yoy and 1.1% qoq sa.
  • Strong AI-driven trade-related growth, which outweighed energy headwinds, should sustain in 2H26.
  • Modern services will remain a key anchor, with notable resilience in financial services.
  • We continue to monitor downside global uncertainties arising from developments in the Middle East.
  • Forecast implications: We maintain our 2026 real GDP growth forecast at 4.3%.
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Robust growth in 2Q26


Singapore’s economy remained resilient in 2Q26 despite the shock stemming from tensions in the Middle East. Advance estimates showed real GDP growing well above trend at 5.7% yoy and 1.1% qoq sa in 2Q26, compared with the upwardly revised 6.3% yoy and 1.3% qoq sa in 1Q26. This translated to strong expansion of 6.0% yoy in the first half of this year, and we expect positive carryover effects in 2H26.

We maintain our 2026 real GDP growth forecast at 4.3%. We expect the positive trends observed in 2Q26 - robust trade-related performance, resilient modern services expansion, and sustained tailwinds from domestic construction - to continue in the next few quarters, although the overall GDP cycle is likely to moderate from its blistering pace, partly due to high base effects. Singapore’s economy should remain resilient, although we continue to monitor downside uncertainties posed by a fragile US-Iran truce and a shaky interim peace deal, considering renewed strikes in recent days. A renewed complete blockage of the Strait of Hormuz, coupled with prolonged elevated global energy prices, would pose a material threat to both global and Singapore’s growth prospects.

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Chua Han Teng, CFA

Senior Economist - Asean
hantengchua@dbs.com

 

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