MAS: Finance & Insurance Growth at 3.6% in 2026 as Accommodative Conditions Persist
Central bank survey sees bank loans growing 4.8% and SORA averaging 1.30%, with no policy shift expected in 2026.
By Rajesh Iyer·January 28, 2026·5 min readOrionmano Industries
Central bank survey sees bank loans growing 4.8% and SORA averaging 1.30%, with no policy shift expected in 2026.
MAS Outlook for Finance & Insurance Sector
The Monetary Authority of Singapore’s latest professional forecasters survey projects finance and insurance growth of 3.6% in 2026, underpinned by steady lending and capital market activity in a broadly accommodative macro-financial environment. The median forecast from the March 2026 Survey of Professional Forecasters puts the sector’s year-on-year expansion at 3.6%, with a mean projection of 4.0% and a range of 2.8% to 5.6% across respondents. This follows actual growth of 4.1% in 2025, as recorded in the survey’s outcomes table.
The baseline expectation is consistent with the MAS Monetary Policy Statement of January 2026, which stated that “financial services should be supported by steady lending and capital market activity” alongside a firm outlook for construction and trade-related sectors. The overall economy is forecast to grow at a median of 2.3% in the first quarter of 2026 and 3.6% for the full year, indicating broad economic resilience even as the positive output gap narrows.
Exhibit
Finance & Insurance Growth Forecasts for 2026 (March 2026 MAS Survey)
Median, mean, minimum and maximum projections from professional forecasters
Accommodative financial conditions are reflected in specific lending and rate indicators. The March 2026 survey projects bank loans (end-period growth) at a median of 4.8% for full-year 2026, with a mean of 5.1%. The range of 3.0% to 8.0% suggests a moderately positive lending environment consistent with steady credit demand.
The Singapore Overnight Rate Average (SORA), the benchmark for floating-rate loans, is forecast to average 1.30% per annum in 2026—a decline from the 1.70% recorded in 2025. The median forecast for Q1 2026 SORA stands at 1.30% as well, with the full-year mean at 1.27%. Lower short-term interest rates reduce the cost of borrowing for businesses and households, supporting lending volumes.
The exchange rate outlook reinforces the accommodative stance. The median forecast for the Singapore dollar against the US dollar at end-2026 is 1.250, strengthening from 1.284 at end-2025. A stronger S$ helps dampen imported inflation, preserving purchasing power and reducing the need for tighter monetary policy. MAS confirmed in its 2 March 2026 comments on market conditions that “the Singapore dollar nominal effective exchange rate (S$NEER) remains within its appreciating policy band.”
Inflation and Monetary Policy Stance
Low inflation is the critical enabler of MAS’s policy continuity. The median forecast for CPI-All Items inflation in 2026 is 1.5% (mean 1.5%), while MAS Core Inflation is also forecast at a median of 1.5% (mean 1.6%). These projections fall comfortably within the range MAS projected in its January 2026 statement, which guided core inflation of 0.5% to 1.5% for the year.
The moderation from 2025 inflation is notable. The actual CPI-All Items outcome for 2025 was 0.9%, and MAS Core Inflation was 0.7%, per the March survey’s table of actual outcomes. The rise to 1.5% in 2026 represents a normalisation, not an overheating, and remains contained.
Nearly all survey respondents in both the December 2025 and March 2026 rounds do not anticipate any monetary policy shift in either the January or April 2026 policy reviews. This near-consensus view reflects the assessment that the current policy stance—a modest and gradual appreciation of the S$NEER policy band—remains appropriate. The MAS January statement reinforced this by noting that “the positive output gap is projected to narrow over the course of the year,” reducing pressure to tighten. With inflation within target and demand softening from 2025’s strong 4.1% GDP outturn, the central bank has no immediate need to adjust settings.
External Risks and Resilience
While external risks persist, the published evidence points to continued orderly market functioning. MAS’s 2 March 2026 statement acknowledged it is “closely monitoring developments arising from the ongoing situation in the Middle East, and is assessing the impact on the domestic economy and financial system.” However, the central bank concurrently confirmed that “Singapore’s foreign exchange and money markets continue to function normally.”
The S$NEER, a key transmission channel, “remains within its appreciating policy band, which will continue to dampen imported inflationary pressures.” This gives MAS room to respond only if necessary, rather than pre-emptively.
The labour market provides a further anchor for financial stability. The overall unemployment rate is forecast at 2.1% (seasonally adjusted) at end-2026, with a range of 2.0% to 2.3% across forecasters. This near full-employment condition supports household income, loan servicing capacity, and credit quality across the banking system.
Taken together, the data and official statements confirm that the Monetary Authority of Singapore expects the finance and insurance sector to remain supported by broadly accommodative macroeconomic and financial conditions in 2026. Steady lending growth of around 4.8%, stable short-term rates averaging 1.30%, low and contained core inflation at 1.5%, and a resilient labour market with 2.1% unemployment collectively define an environment conducive to sector expansion. The primary risk—geopolitical spillovers from the Middle East—is being actively monitored, but has not yet disrupted Singapore’s financial infrastructure or forced a policy response.