The Ministry of Trade and Industry (MTI) has announced that Singapore’s economy grew by 6.9% year-on-year in the fourth quarter of 2025. This robust performance has led to an upgrade in the GDP growth forecast for 2026, now projected to be between 2.0% and 4.0%, up from the previous estimate of 1.0% to 3.0%.
The growth in Q4 2025 was driven by strong performances in the manufacturing, wholesale trade, and finance and insurance sectors. Notably, the electronics cluster within manufacturing saw significant growth due to high demand for AI-related electronics. The finance and insurance sector also experienced broad-based growth amidst favourable financial conditions.
Looking ahead to 2026, the global economic environment is expected to remain supportive, with expansionary fiscal policies in major economies like the US, Germany, and Japan. The AI investment boom is anticipated to continue, bolstering demand for semiconductor chips and benefiting Singapore’s electronics and precision engineering sectors.
However, challenges remain, including potential impacts from US tariffs and rising trade barriers. Despite these, the MTI remains optimistic about Singapore’s economic prospects, citing strong order books in aerospace and marine engineering, as well as steady growth in the construction sector.
The upgraded forecast reflects confidence in sustained economic momentum, driven by both global and domestic factors. As Singapore navigates these dynamics, the focus will remain on leveraging growth opportunities whilst mitigating potential risks.
