Here’s why economists expect 2026 growth to soften despite a strong 2025

Analysts warn 2026 may ease as trade risks emerge after a strong, AI-driven 2025.

Economists have raised their growth projections for 2025 after Singapore’s stronger-than-expected third quarter (Q3) numbers, but warn that the momentum may not carry into 2026.

UOB now expects 4.4% growth in 2025 (up from 3.5%), RHB 4% (up from 3%), and Maybank 4.1% (up from 4%).

These upward revisions were driven by robust electronics exports, AI-related demand, and broad resilience across manufacturing, trade-related sectors, finance, and digital services.

Singapore’s Q3 2025 GDP expanded 4.2% year-on-year, beating Bloomberg and bank expectations, bringing average growth for the first three quarters to 4.3%.

But despite the stronger footing, analysts expect growth to moderate in 2026.

RHB’s Barnabas Gan said global trade conditions are improving and rate cuts will offer support, but the rebound does not signal a lasting shift in the external sector.

"The overall outlook remains mixed, with short-term recovery tempered by global trade risks." he said.

UOB Associate Economist Jester Koh cautioned that export growth may slow in early 2026 as this year’s shipments were front-loaded, whilst the delayed effects of US tariffs on Singapore and key trade partners could weigh on performance.

Maybank’s Chua Hak Bin and Brian Lee added that whilst the economy is “firing on multiple cylinders” heading into 2026, activity is likely to normalise after an exceptionally strong 2025 driven by AI demand, falling interest rates and a robust construction pipeline.

Economists’ 2026 GDP forecasts now stand at 2.1% for UOB, 2.8% for Maybank and 3% for RHB—near the upper end of the Ministry of Trade and Industry’s 1–3% range.

Maybank Economists Chua Hak Bin and Brian Lee said the city-state's economy is performing strongly across multiple sectors, a momentum they expect to continue into 2026. “The economy is firing on multiple cylinders that will likely carry forward into next year."

Key drivers include the AI boom, falling interest rates supporting finance and real estate, and ongoing growth in construction supported by a robust project pipeline.

Meanwhile, UOB Associate Economist Jester Koh warned that export growth may slow in early 2026 due to front-loaded shipments this year and delayed effects of US tariffs on Singapore and key trading partners.

UOB forecasts 2.1%, Maybank 2.8%, and RHB 3%, near the top of MTI’s official 1–3% range.