Singapore Dollar: Strong Singapore growth supports SGD against US Dollar – Commerzbank

Commerzbank analysts highlight that Singapore’s final Q2 GDP was revised up, lifting H1 growth to 6.1% year-on-year and prompting MTI to raise its 2026 GDP forecast to 4.5–5.5%. Robust AI-related external demand and financial services underpin the outlook, while USD/SGD has eased to 1.2797 and continues to trend lower from late-June highs near 1.3000.

Upgraded GDP backs Singapore Dollar

"The economy expanded by 6.1% yoy in H1, prompting the Ministry of Trade and Industry (MTI) to raise its full-year growth forecast to 4.5-5.5% from 2.0-4.0%. MTI cited “better-than-expected performance” of the economy in H1 and an improved H2 outlook, supported by a further acceleration in global AI-related capital expenditure."

"Enterprise Singapore also raised its 2026 non-oil domestic export (NODX) growth forecast sharply to 14-16% from 3-5% previously. In H1, NODX expanded by 18.6%."

"Nonetheless, MTI highlighted several downside risks to the outlook. A further escalation and broadening of the Middle East conflict could trigger renewed spikes in energy and other input prices, adding to inflation and tightening global financial conditions."

"By sector, manufacturing growth was revised up to 12.5% yoy from the advance estimate of 12.2%, accelerating from 7.3% in Q1. The strong performance reflected robust AI-related demand for semiconductors and chip-making equipment."

"In FX, USD-SGD fell 0.1% to 1.2797 yesterday as the stronger-than-expected final Q2 GDP reading supported sentiment. The pair has declined steadily from the high in late June of just under 1.3000."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)