Singapore Economics: Upward Revision in 2Q GDP YtO Yet To Clear Hurdle For Oct Steepening, But Risk Remains

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11 Aug 2026 05:40:36 ET │ 18 pages

Singapore Economics

Upward Revision in 2Q GDP Yet To Clear Hurdle For Oct Steepening,

But Risk Remains

CITI'S TAKE

2Q26 GDP was revised upwards slightly more than expected on

manufacturing and services, with sequential growth accelerating and well

above trend on domestic demand and inventory re-stocking. MTI revised

up official GDP forecasts more than expected to 4.5-5.5% (Citi: 5%, prev:

4.8%), which implies 2H26 sequential growth averages -0.2 to 1% QoQ SA

(Citi: +0.4%). With MTI’s raised forecasts likely already incorporated in

MAS’s Jul expectations for a significantly wider positive output gap amidst

possibly higher potential growth assumptions, this sets a higher bar for

upside surprises, with MAS’s Jul point core CPI forecasts also close to Citi’s.

We maintain our call for MAS to stay on hold in Oct for now, but note that

2Q26 wages, broadening growth, improving Jul PMI keeps risk of further

steepening alive, and we keep an eye on incoming hard data for Jul-Aug to

gauge likelihood of an Oct move.

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Wei Zheng Kit AC

2Q26 GDP revised slightly higher from Advance Estimates to +5.9% YoY, +1.4%

QoQ SA (AE: +5.7% YoY, +1.1% QoQ SA), marginally higher vs consensus (+5.8%

YoY, +1.2% QoQ SA) and Citi (+5.8% YoY, +1.1% QoQ SA) forecasts — Sequentially,

growth surprisingly accelerated further from the 1.2% QoQ SA rate in 1Q26. Upward

revisions were seen in manufacturing (12.5% YoY, AE: 12.2% YoY) and services

(+4.9%, AE: +4.6%), though construction (5.8% YoY, AE: 6.2% YoY) was revised

lower. Sequential growth was dominated by manufacturing (+6.3% QoQ SA, 1Q: 2.8%), with construction (-2.5% QoQ SA, 1Q:+ 7.4%) falling and services (+0.5%,

+2.1%) slowing. Within services, sequential growth was dominated by externally

facing infocomm (+7.3%, 4Q: -7.6%) transport/storage (+1.9%, 1Q: 1.6%), financial

services (1.1%, 1Q: 0.6%), business services (+1.2%, 1Q: 1.3%,) and Other service

(0.8%, 1Q: 0.3%). However sequential contractions were seen in wholesale (-1.4%,

1Q: 4%), and consumer/tourism facing retail (-2.2%, 1Q: 1.2%), F&B (-2,8%, 1Q: 0.9%)

and accommodation (-4.6%, 1Q; 2.6%) By expenditure, sequential growth was led

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