Singapore: Singapore expects its economic growth to be affected in the coming quarters amid the ongoing West Asia conflicts, with higher overall inflation projected in 2026, said Deputy Prime Minister Gan Kim Yong. He noted that while early data indicate the republic's economic activity remained resilient in the first quarter of 2026, supported by strong growth momentum from the fourth quarter of 2025, the ongoing global conflicts are expected to weigh on economic activity in the coming quarters.
According to BERNAMA News Agency, Gan stated that in February, the Ministry of Trade and Industry had upgraded Singapore's gross domestic product (GDP) forecast for 2026 between two and four per cent. However, he warned that growth in the coming quarters is likely to be affected by the ongoing conflict. In a ministerial statement on the impact of the West Asia situation on Singapore in Parliament on Tuesday, Gan emphasized that the West Asia situation has impacted some crucial sectors in the republic, with rising global energy and commodity prices.
Gan, who also serves as Singapore's Minister for Trade and Industry, highlighted that these sectoral impacts will continue to weigh on economic activity, although the extent remains uncertain as the conflict is still unfolding. Singapore is a net energy importer, with 95 per cent of its electricity generated from natural gas, and the spike in global oil and natural gas prices will inevitably raise fuel and electricity costs for the republic.
Gan further explained that Singapore should expect a much sharper increase in the next tariff adjustment, which will fully reflect the higher cost of fuel. These cost increases are anticipated to feed through to broader inflation in Singapore. Consequently, Singapore's overall inflation for 2026 is now expected to be higher than previously projected.
In the meantime, Gan emphasized that the ongoing crisis may continue to pressure households with more expensive electricity, transport, and daily necessities. He pointed out that lower-income households will be more affected, as a larger share of their spending goes towards essentials. The Monetary Authority of Singapore (MAS) will take these developments into account in its upcoming assessment of the inflation outlook, which it will release on April 14.