Singapore Dollar: Growth strength fails to lift SGD – Commerzbank

Commerzbank’s Singapore team highlights that Singapore’s Q1 Gross Domestic Product (GDP) was revised sharply higher to 6.0% year-on-year, with strong AI-related demand and robust construction and services activity. Inflation remains contained near the lower end of MAS’s forecast range. Despite this supportive backdrop and lower Oil prices, USD/SGD remains confined within a 1.2650–1.2840 range.

Stronger growth yet contained inflation

"The final Q1 GDP was revised up significantly to 1.0% qoq sa from -0.3% for the advance estimate (Bloomberg consensus: 0.2%) vs 1.3% in Q4 2025. On an annual basis, it translated to 6.0% yoy from 4.6% initially (Bloomberg consensus: 5.2%) vs 5.7% in Q4 2025."

"Despite the strong Q1 outturn, MTI warned that growth headwinds have “risen significantly” due to ongoing supply chain disruptions and higher commodity prices. While AI-related capex is expected to remain supportive through 2026, MTI cautioned that tech firms could scale back investment commitments, weighing on activity."

"On inflation, April CPI held steady at 1.8% yoy (Bloomberg consensus: 2.1%) and unchanged from March. Although fuel and energy inflation picked up sharply, prices for non-energy goods and services remained relatively stable, suggesting limited second-round pass-through from higher global commodity prices."

"In FX, USD/SGD fell 0.2% to 1.2770 yesterday, driven by lower crude oil prices and a weaker USD. The pair has been rangebound since April, holding within the 1.2650-1.2840 range."

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