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Investment share to rise to 23.7% by 2027 despite slower GDP growth

The economy is projected to grow 3.5% in 2026 and 2.7% in 2027.

Singapore’s gross capital formation is projected to rise to 23.7% of GDP by 2027 from 22.5% in 2025, even as economic growth slows, according to an SGX Group report.

The investment share is expected to increase to 23.4% in 2026 before reaching 23.7% the following year, the group said in a market update, citing International Monetary Fund (IMF) projections.

The economy is projected to grow 3.5% in 2026 and 2.7% in 2027, following a 5% expansion in 2025.

SGX attributed recent growth to technology-related exports and investment linked to demand for artificial intelligence and semiconductors.

It said investment in infrastructure, manufacturing capacity, innovation and digitalisation would support future growth.

The IMF identified trade fragmentation, geopolitical tensions, energy-price shocks and a sharper slowdown in global technology investment as the main downside risks.

Singapore’s fiscal and foreign reserve buffers, current account surplus and well-capitalised banking system were cited as key strengths.

The banking sector recorded a capital adequacy ratio of 18.5% in the second quarter of 2025, while its non-performing loan ratio stood at 1.1%.

DBS, OCBC, and UOB account for about 54% of banking system assets and maintained their capital positions under the Monetary Authority of Singapore’s 2025 stress-test scenarios, SGX said.

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