RHB Bank has announced it is maintaining its forecast for Singapore’s GDP growth at 3.0% for 2026, despite recognising potential downside risks that could see growth dip to 2.5%. The bank’s Group Chief Economist and Head of Market Research, Barnabas Gan, highlighted that ongoing geopolitical tensions could further impact growth, potentially reducing it to between 1.0% and 1.5% in a more adverse scenario.
The Monetary Authority of Singapore’s (MAS) recent decision to “slightly” steepen the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) slope was interpreted by RHB as an increase in the appreciation rate to 1.0%, up from 0.5%. This move is expected to remain unchanged in July, although further tightening could occur if tensions in the Middle East continue to elevate global energy prices.
Singapore’s GDP expanded by 4.6% year-on-year in the first quarter of 2026, a slowdown from the 5.7% growth seen in the fourth quarter of 2025. This performance fell short of Bloomberg’s consensus estimate of 5.8% and RHB’s own projection of 5.3%. Gan’s analysis underscores the challenges facing Singapore’s economy amidst global uncertainties.
The report suggests that whilst the current policy settings are likely to remain stable in the short term, the balance of risks could necessitate adjustments later in the year. This outlook reflects the complex interplay of domestic and international factors influencing Singapore’s economic trajectory.
