December 2025 Market Week Analysis
EXECUTIVE SUMMARY
This case study examines the critical implications of the Fed’s December 10, 2025 interest rate decision and major corporate earnings (Oracle, Broadcom, Adobe, Costco) on Singapore’s economy, financial markets, and households. Singapore’s unique position as a small, open economy with strong US economic linkages means these developments will cascade through multiple sectors, from mortgage markets to REITs, from the Singapore Dollar to GDP growth prospects.
Key Takeaway: Singapore stands at an inflection point where declining US rates create opportunities (cheaper mortgages, REIT rebounds) while trade uncertainties pose GDP growth risks for 2026.
PART 1: COMPREHENSIVE OUTLOOK
1.1 Macroeconomic Outlook for Singapore
Current Economic Position (Q3 2025)
Singapore’s economy has significantly outperformed expectations in 2025. MTI upgraded the full-year GDP growth forecast to approximately 4.0%, up from the earlier 1.5-2.5% range. For the first three quarters of 2025, GDP growth averaged 4.3% year-on-year, driven primarily by manufacturing (particularly electronics at 6.1%), wholesale trade, and finance sectors.
However, the Ministry warns of moderation ahead. For 2026, GDP growth is projected at 1.0-3.0%, reflecting the delayed impact of US tariffs, slower growth in key trading partners, and the fading boost from pharmaceutical production that supported 2025 growth.
Interest Rate Trajectory
Singapore’s interest rates move in close tandem with US Fed rates. Currently, SORA (Singapore Overnight Rate Average) has declined to approximately 2.5% from its 2023 peak of 3.6%. If the Fed cuts rates to 3.5-3.75% as expected on Wednesday, SORA is projected to fall further to the 2.2-2.6% range by year-end 2025, with mortgage rates dropping below 2.5%.
The MAS has already eased monetary policy twice in 2025 (in January and April) by reducing the slope of the S$NEER policy band. At its October review, MAS maintained the prevailing modest rate of appreciation, signaling a balanced approach between supporting growth and containing inflation (which has moderated to just 0.5% core inflation).
Trade and Currency Dynamics
The Singapore Dollar faces strengthening pressure if the Fed cuts rates, as USD weakening typically causes SGD appreciation. While this reduces imported inflation (beneficial for consumers), it hurts export competitiveness in a nation where exports exceed 300% of GDP. Manufacturing, which represents 21% of GDP, would face margin pressure from currency appreciation.
The US-China trade truce extended to November 2026 has provided temporary relief, but MTI explicitly warns that “tariffs take time to feed into the economy” and expects impacts to be “more pronounced in 2026.”
1.2 Sectoral Outlook
A. Real Estate & Mortgage Market
Current State: Mortgage rates have fallen from 4.0%+ in late 2022 to 2.5-2.75% in early 2025. Fixed-rate packages are currently more attractive than floating rates, with some banks offering packages below 2.5% for shorter lock-in periods.
2026 Projection: Further easing expected, with fixed-rate mortgages potentially falling below 2.0% by mid-2026 if the Fed continues its cutting cycle. However, the pace will be gradual rather than dramatic.
Property Market Impact: Despite falling rates, government cooling measures (75% LTV caps, 55% TDSR limits, ABSD) remain firmly in place. National Development Minister Desmond Lee has reiterated the government “will not hesitate to introduce further measures” if speculative activity emerges. New supply of only 5,300 private residential units in 2025 (vs. 10-year average of 12,000) supports prices despite higher financing costs.
B. REITs Sector – The Clear Winner
Singapore REITs have staged a strong recovery in Q3 2025, with the iEdge S-REIT Leaders Index delivering 8.95% total return. As of November 2025, the sector offers a trailing twelve-month distribution yield of 5.58% (weighted average 5.32%), substantially above the sub-1.4% yields on Singapore government bonds and 2.5-3% on fixed deposits.
Performance Drivers:
- Declining SORA from 3.6% peak to current 2.5% levels reduces refinancing costs
- Strong occupancy rates (90%+ for leading REITs)
- Positive rental reversions across office (4.8-12.3%), retail, and industrial segments
- Limited new supply in office sector supporting rental growth
Subsector Analysis:
- Data Center REITs (e.g., Keppel DC REIT): Benefiting from AI infrastructure boom, delivering 10% rental reversions
- Industrial REITs (e.g., CapitaLand Ascendas REIT): Raising rental reversion guidance to low double-digits in 2025
- Hospitality REITs (e.g., CapitaLand Ascott Trust): Recovering from travel rebound despite one-off tax adjustments
- Office REITs: Resilient performance with limited CBD supply supporting 2-3% rental growth projections for 2025
Valuation: Sector trading at approximately 17% discount to fair value on simple average (though near fair value on market cap-weighted basis), with Price/NAV at 0.83.
C. Banking Sector – Mixed Outlook
Singapore’s three major banks (DBS, OCBC, UOB) face compressed net interest margins as rates fall. However, this may be offset by:
- Higher loan volumes as borrowing becomes more affordable
- Increased wealth management fees as investors rotate from T-bills/fixed deposits into equities and REITs
- Stronger fee income from capital markets activity
Net interest margins could compress 5-10 basis points over 2025-2026, but banks remain well-capitalized and diversified.
D. Technology & Manufacturing
Singapore’s electronics manufacturing cluster expanded 67.6% in Q3 2025 (particularly infocomms & consumer electronics segment), driven by AI-related semiconductor and server production. This directly links Singapore’s fortunes to companies like Oracle and Broadcom whose earnings are being reported this week.
Oracle’s Relevance: Oracle competes with AWS, Google Cloud, and Microsoft in Singapore’s growing cloud sector. Strong AI infrastructure spending validates Singapore’s push to be an AI hub. The government has invested heavily in data center infrastructure.
Broadcom’s Impact: Singapore’s semiconductor ecosystem includes local suppliers to global chip companies. Positive Broadcom earnings (driven by Google’s Gemini 3 TPU chips) validates demand for advanced packaging services that some Singapore firms provide. Wall Street expects Broadcom to post Q4 EPS of $1.87 (up 31.7%) on revenue of $17.5 billion (up 24.5%).
The government expects AI-related semiconductor demand to continue supporting the electronics cluster through 2026, though uncertainty over US semiconductor tariffs may delay capacity investment decisions.
1.3 Household Impact Outlook
Mortgage Holders
A household with a $1 million HDB loan on a 3.5% package could save approximately $150-200/month by refinancing to a 2.5% SORA-linked package. However, savings may be more modest as banks haven’t passed on rate cuts proportionally.
With mortgage loans totaling S$284.3 billion (growing 5.2% YoY in Q2 2025), this represents the fastest expansion in recent years. Despite this acceleration, household debt-to-asset ratios remain healthy at just 11%, with liquid assets exceeding total liabilities.
The key metric—mortgage payment as percentage of household income for new private property buyers—has improved to 24.7% from higher levels, though this still represents a significant burden.
Investors & Savers
Current landscape:
- Singapore Savings Bonds: ~2%
- Fixed Deposits: 2.5-3%
- S-REITs: 5-6% yields for blue chips
- CPF Special Account: 4%
The falling rate environment makes high-quality REITs increasingly attractive for yield-seeking investors, particularly retirees and those approaching retirement who need income generation.
PART 2: DETAILED SCENARIO ANALYSIS
Scenario A: Fed Cuts 25bps (Base Case – 85% Probability)
Immediate Impact (Dec 10-20)
- SGD strengthens 0.5-1.0% against USD
- S-REITs rally 2-3% on rate cut confirmation
- STI gains 1-2% led by financial and property stocks
- 3-month SORA drops to ~2.45%
3-Month Impact (Q1 2026)
- Mortgage refinancing surge as packages drop to 2.3-2.5%
- REIT DPU growth of 3-5% as refinancing costs fall
- Export manufacturers face margin pressure from SGD strength
- Banks report Q1 NIM compression but offset by volume growth
12-Month Impact (Full Year 2026)
- GDP growth comes in at 2.0-2.5% (mid-range of MTI forecast)
- Full-year REIT sector returns of 12-15% (price appreciation + dividends)
- Household mortgage interest savings of $2-3 billion across economy
- Electronics exports moderate but remain supported by AI demand
Scenario B: Fed Holds Rates (15% Probability)
Immediate Impact
- S-REITs sell off 3-5% on hawkish surprise
- SGD weakens 1-2% against USD (actually beneficial for exports)
- STI flat to down 1%
- SORA remains sticky around 2.5%
3-Month Impact
- Mortgage market stalls as homeowners delay refinancing
- REIT valuations compressed as T-bill yields stay attractive
- Export sector outperforms on weaker SGD
- Banking sector benefits from sustained NIMs
12-Month Impact
- GDP growth at upper end of range (2.5-3.0%) due to export competitiveness
- REIT returns moderate to 5-8%
- Property market cooling as mortgage affordability worsens
- Inflation ticks up 0.2-0.3% from imported price pressure
Scenario C: Fed Cuts 50bps (Aggressive – <5% Probability)
Immediate Impact
- SGD surges 2-3% against USD
- S-REITs rally 5-7% on aggressive easing signal
- STI jumps 3-4%
- SORA plunges toward 2.2%
3-Month Impact
- Mortgage rates fall below 2.0% for best packages
- Housing market activity surges despite cooling measures
- Export sector faces severe margin compression
- MAS may need to ease SGD policy further to prevent excessive appreciation
12-Month Impact
- GDP growth at lower end (1.0-1.5%) as export collapse offsets domestic strength
- Risk of property bubble formation despite government controls
- REIT sector overheats with 20%+ returns but faces sustainability questions
- Trade deficit widens significantly
PART 3: COMPREHENSIVE SOLUTIONS FRAMEWORK
3.1 Solutions for Individual Households
For HDB Homeowners with Outstanding Loans
Immediate Actions (This Week)
- Mortgage Review: Contact your bank to understand refinancing options
- Calculate potential savings using online mortgage calculators
- Current 3.5% rate vs. projected 2.5% rate on $500K loan = $420/month savings
- Factor in legal fees ($2-3K) and lock-in penalties
- Decision Framework:
- If on floating rate above 3.0%: Strongly consider refinancing to fixed rate (2.3-2.5%) with 2-3 year lock-in
- If on fixed rate 2.8-3.2%: Calculate break-even point considering exit penalties
- If on floating rate below 2.8%: Consider staying put and monitoring for further cuts
- Strategic Timing:
- Don’t wait for “perfect” bottom—missing 3-6 months of savings while waiting costs $1,500-3,000
- Use mortgage brokers (like DollarBack, MortgageMaster) for free comparison
- Consider packages with shorter lock-ins (1-2 years) for flexibility
For Private Property Owners
Asset Enhancement Strategy:
- Refinancing: Same principles as HDB but larger loan amounts mean bigger savings
- $1.5M loan: 1% rate reduction = $1,250/month savings
- Equity Release: With property values supported by supply constraints, consider refinancing to access equity for:
- Investment in high-yielding REITs (5-6% vs. <2.5% mortgage cost = positive carry)
- CPF Top-ups for tax relief
- Children’s education funding
- Portfolio Rebalancing:
- If over-concentrated in property (>60% of net worth), use equity release to diversify
- Target allocation: 40% property, 30% REITs, 20% equities, 10% fixed income/cash
For First-Time Buyers
Entry Strategy:
- BTO vs. Resale Analysis:
- With mortgage rates falling, resale flat affordability improves
- Factor in lower interest costs over 25-year loan tenure
- Use CPF Housing Grant if eligible ($80K for BTO, $50K for resale)
- Affordability Stress Test:
- Assume rates could rise back to 3.5% by 2028-2030
- Ensure 55% TDSR compliance even at stress rate
- Build emergency fund (6 months expenses) before purchase
- Timing Consideration:
- Current environment favors buying due to:
- Limited new supply (5,300 units vs. 12K average)
- Falling mortgage costs
- Government unlikely to ease cooling measures
- But be prepared for flat to modest capital appreciation (2-3% annually)
- Current environment favors buying due to:
3.2 Solutions for Investors
Conservative Income Portfolio (Retirees, Risk-Averse)
Target: 5-6% annual yield with capital preservation
Portfolio Construction (S$500,000 example):
- 40% ($200K): Blue-chip S-REITs
- $70K: CapitaLand Integrated Commercial Trust (Diversified, 4.8% yield)
- $70K: CapitaLand Ascendas REIT (Industrial, 5.5% yield)
- $60K: Mapletree Pan Asia Commercial Trust (Office/Retail, 5.2% yield)
- 25% ($125K): Singapore Banks
- $45K: DBS (Largest, most diversified)
- $40K: OCBC (Strong wealth management)
- $40K: UOB (Regional exposure)
- 20% ($100K): Singapore Government Securities & SSB
- Ladder maturities from 1-10 years
- Provides liquidity buffer and deflation hedge
- 15% ($75K): CPF Special Account top-ups (if eligible)
- Guaranteed 4% with tax relief up to $8K/year
Expected Returns: 5.2% yield + 2-3% capital appreciation = 7-8% total return
Rebalancing Rules:
- If REITs rally 20%+, take profits and move to bonds/cash
- If REITs fall 15%+, deploy cash reserves to average down on quality names
- Quarterly review, annual major rebalancing
Growth Portfolio (Working Professionals 30-50 years)
Target: 10-12% annual total return with moderate risk
Portfolio Construction (S$300,000 example):
- 30% ($90K): Growth-Oriented S-REITs
- $35K: Keppel DC REIT (Data centers, AI beneficiary)
- $35K: CapitaLand Ascendas REIT (Industrial/business parks)
- $20K: Centurion Accommodation REIT (Higher risk, worker accommodation)
- 25% ($75K): Singapore Mid-Cap Growth Stocks
- $25K: iFast Corporation (Wealth tech, benefits from REIT flows)
- $25K: CSE Global (Infrastructure, AI data centers)
- $25K: Singapore O&G Limited (Shipping, trade recovery)
- 20% ($60K): US Tech Exposure
- $30K: S&P 500 ETF (Broad US exposure)
- $30K: Nasdaq-100 ETF (Tech concentration)
- 15% ($45K): Regional Tech/AI
- $45K: Lion-OCBC Securities Hang Seng Tech ETF (China tech recovery)
- 10% ($30K): Singapore Banks (Core holding)
Risk Management:
- Stop-loss at 25% portfolio level
- Maximum single stock position: 10%
- Quarterly rebalancing or when any position deviates 5%+ from target
Aggressive Opportunistic Portfolio (High Risk Tolerance)
Target: 15-20% annual return, accepting higher volatility
Portfolio Construction (S$200,000 example):
- 35% ($70K): High-Beta REITs
- $25K: Centurion Accommodation REIT (New listing, growth potential)
- $25K: Keppel Pacific Oak US REIT (Deep value, 0.34x P/NAV)
- $20K: Digital Core REIT (Tech data centers, high growth)
- 30% ($60K): Small-Cap Singapore Stocks
- $20K: Food Empire (Regional FMCG growth)
- $20K: Marco Polo Marine (Offshore/marine recovery)
- $20K: Yoma Strategic (Myanmar exposure—very high risk)
- 20% ($40K): Options/Derivatives
- Sell cash-secured puts on REITs at 10% OTM strikes
- Covered calls on bank holdings to generate 1-2% quarterly income
- 15% ($30K): Crypto/Alternative Assets
- Bitcoin ETF or direct holding
- Gold ETF as hedge
Warning: This portfolio can experience 30-40% drawdowns. Only suitable for investors who:
- Don’t need capital for 5+ years
- Have substantial emergency funds
- Can psychologically handle volatility
- Have experience with derivatives
3.3 Solutions for Businesses
For Export-Oriented Manufacturers
Currency Risk Management:
- Forward Contracts: Lock in USD/SGD rates for 3-6 month production cycles
- Natural Hedging:
- Negotiate to pay suppliers in USD where possible
- Shift production to USD cost-base countries if margins erode significantly
- Pricing Strategy:
- Build currency clauses into contracts
- Implement quarterly pricing reviews
- Focus on value-add segments where price elasticity is lower
Operational Optimization:
- Accelerate automation/AI adoption to reduce labor costs
- Focus on higher-margin, specialized products
- Explore export credit insurance through Enterprise Singapore
For Property Developers
Strategic Positioning:
- Land Banking: Current low rates + limited pipeline = opportunity
- Bid aggressively for GLS sites in good locations
- Expect rental yields to compress further (positive for capital values)
- Launch Timing:
- Accelerate launches before potential market overheating
- Price competitively to gain market share in supply-constrained environment
- Product Strategy:
- Focus on 2-3 bedroom units (upgrader sweet spot)
- Emphasize locations near MRT, schools, amenities
- Build flex-spaces for WFH demand
For REITs Managers
Capital Management:
- Refinancing Aggressiveness:
- Refinance all debt maturing in next 24 months immediately
- Consider terming out floating rate debt to fixed
- Target blended all-in cost of debt below 3.0%
- Acquisition Strategy:
- Use equity strength (post-rally) for yield-accretive acquisitions
- Focus on assets with rental reversion potential
- Geographic diversification to hedge Singapore-specific risks
- Asset Management:
- Accelerate AEIs to drive rental growth
- Active lease management to lock in current market rents
- ESG investments to attract institutional capital
3.4 Policy Solutions for Government
MAS Monetary Policy Recommendations
Near-Term (Q1 2026):
- Maintain current modest appreciation stance
- Monitor SGD NEER closely—if SGD strengthens >5% vs. basket, consider neutralizing policy band slope
- Prepare for potential easing if export sector shows distress
Medium-Term (2026):
- Coordinate with fiscal policy for targeted support to affected sectors
- Consider FX intervention if SGD appreciation becomes disorderly
- Enhanced communication to manage market expectations
Housing Policy Adjustments
Calibrated Easing Options (if property market stays cool despite rate cuts):
- ABSD Adjustments:
- Reduce ABSD for Singapore Citizens’ second property from 20% to 15%
- Maintain high rates for foreigners (60%) and PRs (30%)
- TDSR Flexibility:
- Increase to 60% for first-time buyers of HDB resale flats
- Maintain 55% for private property
- LTV Loosening:
- Increase to 80% for first HDB/property purchases
- Keep 75% for subsequent properties
Risk Management:
- Tie any easing to strict income documentation
- Implement sunset clauses (2-year review periods)
- Geographic targeting (ease only for non-prime districts)
Economic Diversification Initiatives
AI & Technology Hub Development:
- Data Center Incentives:
- Fast-track approvals for green data centers
- Tax incentives for AI infrastructure investments
- Partnering with Oracle, Google, Microsoft for sovereign AI capabilities
- Semiconductor Ecosystem:
- Support for advanced packaging facilities
- R&D grants for AI chip design
- Workforce development in semiconductor engineering
- Financial Technology:
- Regulatory sandboxes for AI-driven finance
- Digital asset hub development
- Cross-border payment infrastructure
PART 4: LONG-TERM SOLUTIONS (2026-2030)
4.1 Structural Economic Transformation
Reducing Trade Dependency
Problem: Singapore’s exports at 300%+ of GDP create excessive vulnerability to global trade wars and tariff regimes.
5-Year Solution Framework:
- Domestic Demand Cultivation (Target: Increase private consumption from 35% to 42% of GDP)
- Population Growth: Target 6.0M population by 2030 (vs. current 5.9M)
- Income Growth: Push median household income from $10,869 to $13,000/month
- Spending Incentives: Enhanced tourism infrastructure, entertainment options, lifestyle amenities
- Services Export Expansion (Target: Services from 25% to 35% of total exports)
- Financial Services: Wealth management hub for Asia’s UHNW individuals
- Professional Services: Regional HQ for MNCs serving ASEAN
- Digital Services: Software, AI, fintech export platform
- Healthcare Tourism: Expand capacity for high-value medical procedures
- Value Chain Upgrading
- Shift from commodity electronics to specialized semiconductors
- Focus on bio-pharma high-value APIs
- Move up aerospace value chain to design/engineering
Expected Impact: By 2030, reduce exports to 250% of GDP while maintaining absolute export levels, creating more balanced and resilient economy.
Financial Market Deepening
Problem: Singapore’s stock market has underperformed regional peers, with STI trailing MSCI Asia ex-Japan by 5-8% annually over past decade.
5-Year Solution Framework:
- Market Structure Reforms (Recently announced by SGX)
- Lower listing costs for tech companies
- Enhanced liquidity incentives for market makers
- Simplified dual-class share structures
- Fast-track listing for unicorns
- Retail Participation Enhancement
- CPF Investment Scheme expansion to include broader universe of stocks
- Financial literacy programs in schools (mandatory from Secondary 1)
- Tax incentives for long-term equity holding (e.g., capital gains tax exemption for 5+ year holds)
- Institutional Capital Attraction
- REIT tax advantages (0% withholding tax for foreign institutions)
- Sovereign wealth fund co-investment programs
- Regional pension fund partnerships
Expected Impact: Increase STI market cap from current ~$700B to $1.2T by 2030, improve liquidity, reduce discount to regional peers from 25% to 10%.
4.2 Household Financial Resilience
Retirement Adequacy Crisis
Problem: Despite CPF system, many Singaporeans face retirement shortfalls. Current Full Retirement Sum of $205,800 provides only ~$1,660/month for 20 years.
Long-Term Solutions:
- Enhanced CPF Returns
- Increase Special Account rate from 4.0% to 5.0% for balances up to $200K
- Allow partial self-investment of OA (beyond current 35%) into approved REITs and blue chips
- Introduce “CPF Growth Account” with equity exposure for those >25 years from retirement
- Mandatory Annuitization
- Increase CPF Life premiums gradually
- Introduce mandatory private pension contributions (3% employer, 2% employee) on top of CPF
- Link pension payouts to longevity-indexed bonds
- Housing Wealth Monetization
- Expand Lease Buyback Scheme eligibility
- Introduce “Reverse Mortgage” products backed by government guarantee
- Allow partial home equity drawdown for medical/LTC expenses
Expected Impact: By 2030, increase median retirement adequacy from current 60% to 80% of pre-retirement income.
Wealth Inequality Mitigation
Problem: Gini coefficient at 0.452 (after transfers), with bottom 20% owning <1% of total wealth.
Long-Term Solutions:
- Progressive Wealth Building
- “Baby Bonds”: $5,000 CDA contribution for every citizen at birth, invested in diversified portfolio until age 21
- “First-Generation Wealth Fund”: Matched savings program for low-income workers (government matches $1 for every $2 saved, up to $3,000/year)
- Enhanced Workfare supplements tied to CPF contributions
- Asset Ownership Democratization
- Mandate employee share ownership plans for companies >100 employees
- Government co-investment in employee stock purchases (up to $5,000/year)
- Community REIT structures for HDB estate commercial properties
- Intergenerational Wealth Transfer Reform
- Inheritance tax on estates >$5M (starting at 10%, up to 30% for estates >$50M)
- Revenue directed to “Singapore Future Fund” for young citizens’ education/housing
Expected Impact: Reduce Gini coefficient to 0.40 by 2030, increase bottom 50% wealth share from 5% to 12%.
4.3 REIT Sector Evolution
Next-Generation REIT Structures
Innovation Opportunities:
- Green REITs
- Dedicated green building portfolios with sustainability-linked financing
- Carbon credit generation and monetization
- Government incentives: 0.5% p.a. interest subsidy for certified green buildings
- Infrastructure REITs
- Expand beyond current data centers to:
- EV charging networks
- Solar farms and energy storage
- Water treatment facilities
- 5G/6G telecommunications infrastructure
- Expand beyond current data centers to:
- Social REITs
- Eldercare facilities (Singapore’s 65+ population to hit 900K by 2030)
- Student housing (as university enrollment expands)
- Affordable co-living spaces for young professionals
Regulatory Framework Required:
- Expand list of eligible REIT assets beyond current property focus
- Allow higher gearing (50% vs. current 45%) for infrastructure assets with stable cash flows
- Introduce “Social REIT” category with tax advantages (e.g., 15% vs. 17% corp tax)
Expected Impact: By 2030, double REIT market cap to $160B, increase sector diversity from current 7 to 12 subsectors.
4.4 Technology & Innovation Ecosystem
AI Superpower Ambitions
Problem: Singapore has strong AI research but lags in commercialization vs. US, China.
10-Year Vision (2025-2035):
- Sovereign AI Capabilities
- National AI Computing Infrastructure (10,000 GPU cluster for research)
- Partnership with OpenAI, Anthropic, Google for localized models
- Mandarin/Malay/Tamil language models for Southeast Asian markets
- AI Commercialization Engine
- $10B “AI Singapore Fund” for startups and scale-ups
- Tax super-deduction: 300% for AI R&D expenses
- Fast-track EP/PR for global AI talent (target: 50,000 AI professionals by 2035)
- Regulatory Innovation
- World’s first comprehensive AI governance framework
- “AI Sandbox” for regulated industries (finance, healthcare)
- Cross-border data flow agreements for AI training
Expected Impact:
- Become Asia’s #1 AI hub (outside China)
- 5% of GDP from AI-related activities by 2035
- Home to 10+ AI unicorns
Biotech & Life Sciences Hub
Building on pharmaceutical manufacturing success:
- R&D to Manufacturing Pipeline
- Streamlined FDA/HSA approval processes for new drugs
- Tax incentives for Phase 2/3 clinical trials conducted in Singapore
- Manufacturing facilities co-located with research institutes
- Precision Medicine Initiative
- National genomic database (opt-in, privacy-protected)
- AI-driven drug discovery partnerships
- Regional center for rare disease treatments
- Medical Device Innovation
- Regulatory fast-track for breakthrough devices
- Elderly care tech focus (aging population)
- Export platform to ASEAN markets
Expected Impact:
- Biotech to grow from 7% to 12% of GDP by 2035
- Position as Asia’s Boston/Basel for life sciences
PART 5: COMPREHENSIVE IMPACT ASSESSMENT
5.1 Economic Impact Matrix
Aggregate Macroeconomic Impacts
| Aggregate Macroeconomic Impacts | ||||
| Indicator | 2025 (Actual) | 2026 (Baseline) | Fed Cut Impact | Fed Hold Impact |
| GDP Growth | 0.04 | 1.5-2.5% | #ERROR! | -0.2% to -0.5% |
| Core Inflation | 0.005 | 0.5-1.5% | -0.1% to -0.2% | +0.2% to +0.3% |
| Unemployment | 0.021 | 2.2-2.4% | No change | -0.001 |
| SGD/USD | 1.34 | 1.30-1.33 | Stronger (1.30-1.31) | Weaker (1.35-1.36) |
| SORA (3M) | 0.025 | 2.2-2.4% | 0.022 | 2.6-2.7% |
| Property Price Index | 0.02 | +1% to +3% | +2% to +3% | 0% to +1% |
Trade Balance Impact:
- Fed Cut Scenario: Export values decline 2-3% YoY due to SGD strength, partially offset by volume growth
- Fed Hold Scenario: Export competitiveness improves, values grow 3-4% YoY
Government Fiscal Impact:
- Lower rates reduce debt servicing costs by $200-300M annually
- Property tax revenues may increase 3-5% from higher valuations
- Overall: Neutral to slightly positive fiscal impact