Fortunately, the economy’s strong performance this year gives us momentum as we enter 2026. That makes the short-term challenge, therefore, manageable. The key focus is the long-term policy changes Singapore must make to respond to a world that is structurally less supportive of a small, open economy like Singapore’s.
A year ago, as we put our thoughts together on Singapore’s prospects for 2025, we expected a period of significant turbulence that would hinder our growth outlook. In the end, there was indeed significant turbulence in geopolitics, trade, financial markets and technology. But things did not fall apart, and the economy expanded at a much stronger pace than anyone thought possible. Predicting the economy is difficult, but we still need to do our best to outline the likely scenarios for the coming year.
The prudent assumption is that the external environment will be challenging in the coming year: there are still positive factors in the early part of 2026, but we think the world economy is set to slow thereafter.
