Singapore’s 4Q25 GDP growth was revised up to 6.9% year on year and 2.1% quarter on quarter (seasonally adjusted). This is higher than the advance estimates of 5.7% year on year and 1.9% quarter on quarter. The upgrade was driven by stronger manufacturing output, and better results in services and construction.
Full-year 2025 growth was also revised higher, to 5.0% from 4.8%. This points to a stronger growth backdrop heading into 2026.
Growth Outlook And Key Drivers
The Ministry of Trade and Industry raised its 2026 GDP growth forecast range to 2.0% to 4.0%, from 1.0% to 3.0% previously. The research note links this better outlook to continued AI-related activity and updates to the government’s medium-term growth assumptions.
With the government now forecasting 2026 growth of “2.0 to 4.0 per cent,” we should position for continued bullish momentum in Singapore-linked assets. The stronger-than-expected growth at the end of 2025, led by the AI sector, supports this view. This revision is an important signal for our strategies in the weeks ahead.
We see an opportunity to increase long exposure through Straits Times Index (STI) futures, as corporate earnings often follow stronger economic growth. Recent data supports this: the January 2026 manufacturing PMI stayed in expansion at 50.8. We can also buy call options on the STI, targeting a move toward the 3,500 level by the end of the quarter.
The strong 2025 GDP results, including 5.0% full-year growth, should also support the Singapore dollar. Core inflation in January 2026 edged up to 3.1%, giving the Monetary Authority of Singapore little reason to ease its gradual currency appreciation policy. We should consider buying SGD against USD using futures or options.
Volatility Positioning And Premium Strategies
This clearer and more positive economic picture may reduce market volatility, as uncertainty fades. In past periods of steady growth, such as 2017 and 2018, implied volatility on STI options often declined for months. As a result, selling out-of-the-money puts on major Singapore blue-chip stocks or index ETFs could be a sensible way to collect premium.
Create your live VT Markets account and start trading now.
here to set up a live account on VT Markets now
