Commerzbank’s Singapore-based team reports that Singapore's manufacturing sector continued its expansion in August, with the Purchasing Managers' Index (PMI) rising to 51.5 from 51.4 in July, marking the 13th consecutive month of growth. New orders increased to 52.0 from 51.9, new export orders edged up to 51.7 from 51.6, and employment improved to 51.2 from 51.1. The electronics PMI was even stronger at 52.6, up from 52.4, its 15th straight month above 50, driven by an AI-fueled semiconductor cycle. Electronics new orders and new export orders also rose, reaching 53.3 and 52.8, respectively. Despite these positive trends, supply-chain disruptions persist, with supplier deliveries worsening and input prices rising [1].
The September MAS Survey of Professional Forecasters reflected this robust outlook, with the median 2026 GDP growth forecast raised sharply to 5.0% from 3.5% in June, approaching the upper end of the government's 4.5-5.5% range. Manufacturing growth projections were upgraded to 8.4% from 5.0%, and the non-oil domestic exports (NODX) forecast was revised up significantly to 17.0% from 6.1%. Inflation expectations for 2026 were revised lower, with headline inflation now forecast at 2.1% (down from 2.3%) and core inflation at 1.9% (down from 2.0%). The MAS projects headline and core inflation at 1.5-2.5% for the current year [1].
On the monetary policy front, 45% of survey respondents expect the Monetary Authority of Singapore (MAS) to steepen the SGD NEER slope in October, up from 30% in June, while 55% anticipate no change. Professional forecasters have raised their median end-2026 USD/SGD forecast, and Commerzbank expects the Singapore dollar to consolidate in the 1.2650-1.2800 range in the near term. The combination of stronger growth and contained inflation is seen as modestly supportive for the Singapore dollar [1].
CONCLUSION
Singapore's economic outlook has brightened, with upgraded growth and export forecasts, robust manufacturing data, and lower inflation expectations. While supply-chain challenges persist, the overall environment is seen as supportive for the Singapore dollar, with the MAS potentially considering further policy tightening in October.