A cyclical upswing in growth is under way driven by goods trade. But improved momentum has yet to extend beyond the export-oriented sectors, and structural headwinds to growth from aging, tighter foreign worker policies, and slow productivity growth remain. Inflation has turned positive after two years of subzero readings and the financial cycle is firming. Singapore’s external position continues to be substantially stronger than warranted by medium-term fundamentals and desired policies. Risks to the outlook are broadly balanced. Being highly open to trade and financial flows, Singapore stands to benefit from improving global sentiment. But more inward-looking policies in major economies and slowdowns in emerging economies would have an adverse impact. Domestic risks mainly relate to elevated household and corporate sector leverage, and the disruptive potential of economic restructuring through new technologies and automation for employment and inequality.