Singapore’s Ministry of Trade and Industry (MTI) has revised its 2026 GDP growth forecast upwards to a range of 4.5% to 5.5%, citing a stronger-than-expected economic performance in the first half of the year. This adjustment comes after the economy grew by 5.9% year-on-year in the second quarter, following a 6.3% expansion in the first quarter.
The revision reflects the impact of a global surge in AI-related capital expenditure, which has bolstered growth in key sectors such as manufacturing, wholesale trade, and finance and insurance. The manufacturing sector, in particular, saw significant growth driven by demand in electronics and precision engineering, whilst the finance and insurance sector benefited from strong credit growth.
Despite these positive trends, some sectors faced challenges. The food and beverage services sector contracted due to increased outbound travel and a decline in visitor arrivals. Additionally, the chemicals cluster within manufacturing remains affected by disruptions in crude oil supplies due to ongoing Middle East tensions.
Looking ahead, MTI anticipates continued growth in AI-related sectors, although global risks such as potential escalations in the Middle East conflict and US tariff actions could pose challenges. The ministry’s upgraded forecast underscores Singapore’s resilience amidst a complex global economic landscape, with AI-driven sectors expected to play a pivotal role in sustaining growth.
