In its preliminary end-of-mission statement for the 2026 Article IV consultation, International Monetary Fund staff said Singapore is entering a period of elevated global uncertainty from a position of strength, but the war in the Middle East is expected to slow growth and raise inflation. Staff now projects growth of 3.5 percent in 2026 and 2.7 percent in 2027, while headline inflation is expected to rise to 2.6 percent in 2026 before easing to 1.9 percent in 2027. It judged Singapore’s monetary and fiscal settings broadly appropriate. Staff assessed the Monetary Authority of Singapore’s April 2026 tightening as appropriate and said it should remain data dependent and be ready to tighten further if second-round inflation pressures emerge. The fiscal surplus is projected to narrow to 1.0 percent of GDP in FY2026 from 1.6 percent in FY2025 as development spending rises. Temporary and targeted support for households and businesses affected by the Middle East war may be needed, but fiscal policy should be implemented carefully to avoid adding to inflation. The statement also described the financial sector as resilient, with well-capitalized and liquid banks and contained housing-related systemic risks, while calling for continued vigilance over cross-border exposures, vulnerable corporates, and links between banks and non-bank financial institutions. On longer-term growth, it pointed to Singapore’s AI strategy and the need for continued workforce re-skilling and upskilling. Subject to management approval, staff will prepare a report for discussion and decision by the IMF Executive Board.
International Monetary Fund2026-05-18
International Monetary Fund staff completes Singapore Article IV mission and says Middle East war will slow growth and may require further tightening
International Monetary Fund staff, in their preliminary 2026 Article IV consultation statement, said Singapore faces elevated global uncertainty from a position of strength, with the Middle East war expected to slow growth and raise inflation, and judged current monetary and fiscal settings appropriate. Staff endorsed the Monetary Authority of Singapore’s April 2026 tightening and urged a data-dependent stance with readiness to tighten further if second-round inflation pressures emerge, while calling for targeted fiscal support and vigilance over financial sector risks.