DBS report says Singapore GDP could more than double by 2040

Singdollar could be trading 1-for-l against US dollar, with STI climbing to 10,000 points

- Timothy Goh

Singapore's economy could more than double by 2040, with the Singapore dollar potentially trading 1-for-1 against the US dollar and the Straits Times Index (STI) climbing to 10,000 points over the 15-year period, the Republic's largest bank said in an Oct 22 report.

The DBS Singapore 2040 report, which outlines the bank's projections for the economy, forecast that Singapore's gross domestic product could reach between US$1.2 trillion (S$1.56 trillion) and US$1.4 trillion by 2040 from US$547 billion in 2024, driven by capital accumulation, human capital development and productivity gains.

It said the Republic's growth has been underpinned by institutional strength and rising educational quality, which have helped sustain the country's competitiveness over the past few decades.

Singapore rebounded strongly from the Covid-19 pandemic and now ranks as the eighth-largest economy in the Asia-Pacific and the second-largest in Southeast Asia, while its nominal GDP more than doubled to US$547 billion in 2024, up from US$240 billion in the aftermath of the global financial crisis in 2010.

"We forecast Singapore's real GDP to grow at an average of 2.3 per cent annually between 2025 and 2040. Our projected economic expansion is expected to outstrip that of other advanced economies, and remains respectable for a mature country that has already reached the high-income frontier," said DBS.

The report also noted that the US dollar may enter a multiyear correction as policymakers appear more open to a weaker currency, which creates room for the Singapore dollar to appreciate.