Singapore Prime Minister Warns of Growth and Inflation Risks Amid Middle East Conflict

On 8 June 2026, Prime Minister Lawrence Wong told a Singapore Press Club audience that the economy has not yet absorbed full impact of the Middle East conflict that began in February 2026. He warned of downside risks and said growth and inflation pressures are likely in the second half of the year. The conflict has disrupted oil shipments through the Strait of Hormuz, prompting alternative supplies and inventory draw-downs. Wong cautioned that prolonged disruption could erode buffers, reduce demand and trigger shortages.

Bloomberg

• Q1 2026 GDP grew 6 % YoY, beating a 4.6 % estimate; Bloomberg’s poll projects full-year 2026 growth at 3.3 %.

Bloomberg

• Electricity, food and fertilizer tariffs have not yet fully reflected the rise in crude oil, keeping inflation muted.

Bloomberg

Wong said AI-driven demand supports activity, but government is vigilant about AI impact on job market. He reaffirmed plans to diversify trade links, noting outreach to India, Gulf, Europe and diplomatic visit to North Korea. Trade ministry warned that geopolitical and supply-chain disruptions could weigh on economy in months ahead. Wong welcomed US-China summit between President Donald Trump and President Xi Jinping, calling open communication a safeguard against miscalculation and conflict.

Bloomberg

Singapore’s trade-dependent economy makes it vulnerable to global demand swings and energy price volatility. Prolonged supply-chain strain could curb exports, while delayed inflation pass-through may erode household purchasing power. The government emphasizes social resilience via lifelong skill development and targeted household support to preserve living standards.

Bloomberg

Bloomberg forecasts 3.3 % annual growth, while the Straits Times reports a 6 % first-quarter expansion, underscoring uncertainty in the full-year outlook. The timing for electricity, food and fertilizer tariffs to fully reflect higher oil prices remains unclear.

Bloomberg

• “There’s a lag,” — Lawrence Wong, Prime Minister of Singapore

Bloomberg

• “There are downside risks and we do expect more pressures to come on both growth and inflation in the second half of the year.” — Lawrence Wong, Prime Minister of Singapore

Bloomberg

• “We cannot fully control how the world changes, but we can choose how we respond, and that response must come from Singaporeans ourselves,” — Lawrence Wong, Prime Minister of Singapore

The Straits Times

• “For sure, there will be competition, even intense competition, but hopefully that competition will not escalate into outright confrontation or conflict,” — Lawrence Wong, Prime Minister of Singapore

Bloomberg

The government will act on recommendations from its ongoing economic-strategy review, sharpening Singapore’s value proposition and bolstering public-private resilience. Monitoring AI-related labour shifts and deepening trade ties with India, the Gulf and Europe are slated for the second half of 2026.

The Straits Times