S'pore economy could reach $1.5 trillion by 2040, lift STI to 10,000: DBS

Report calls for marketwide shift to unlock the country's long-term growth potential

- Benjamin Lim Correspondent

The Straits Times Index (STI) rose over the week to close at just above 4,422 on Oct 24, after the launch of a DBS Bank report projecting that the blue-chip benchmark could reach 10,000 points by 2040 if growth continues to lift sentiment.

The DBS Singapore 2040 report, released on Oct 22, also noted that the Singdollar could reach parity with the US dollar over the 15-year period, supported by the potential expansion of the local economy to between US$1.2 trillion (S$1.56 trillion) and US$1.4 trillion by 2040 from US$547 billion in 2024.

Singapore has seen a stock market rally that has driven the STI to record highs in 2025 despite global geopolitical and tariff uncertainties.

The real estate sector showed the biggest positive change year to date from 2024, while financial services, industrials, communications services, and information technology sectors all recorded growth, DBS said.

Attractive yields and valuations, as well as low domestic interest rates, have also helped increase the Republic's appeal to investors.

"The ability to offer attractive dividend yields appears to have become part of the Singapore equity market's DNA," said the report.

A target of 10,000 points by 2040 would mean that the index would need to see a further gain of 126.1 per cent in the next 15 years.