The Singapore-listed banking group has made a number of predictions about the city-state's economy and markets for the coming 15 years.

DBS predicts that real gross domestic product in Singapore – the bank’s home city-state – will rise by an average annual clip of 2.3 per cent from 2025 through 2040, more than doubling to $1.4 trillion.

The lender also predicts that “disciplined policy and safe-haven appeal point to a stronger Singapore dollar; the currency will consolidate its role as one of the “world’s most stable currencies,” possibly reaching parity with the US dollar by 2040.

In other forecasts, DBS thinks that the Straits Times Index (STI) of Singapore stocks could, based on historical return patterns, rise to almost 10,000 by 2040, having surpassed 4,000 this year. The jurisdiction's stock market, however, needs further development and is "underinvested," DBS said.

"Reaching 5,500 within 3.5 years requires continued reforms, stronger investor sentiment, a low-interest-rate environment, and a sustained 12-month forward PE [price/earnings ratio] of 14.5x with an annual EPS [earnings per share] growth rate of 5 per cent," DBS said.

DBS expects the services sector to contribute nearly 74 per cent of Singapore’s nominal gross value-add. Within services, Singapore is expected to bolster its status as a “high-value entrepĂ´t, global finance hub, and digital IT services leader,” and expand its care economy sector.