Singapore lifts 2026 GDP growth forecast on AI demand

Singapore raised its 2026 gross domestic product growth forecast on Thursday, citing stronger-than-expected economic performance in the second quarter and robust demand from artificial intelligence-linked industries.

The Ministry of Trade and Industry increased the 2026 GDP growth projection to a range of 1.5% to 3.5%, up from the previous estimate of 1.0% to 3.0%. The revision follows data showing the economy expanded 2.9% year-on-year in Q2 2024, exceeding market expectations of 2.4%.

The acceleration was attributed in part to sustained demand for AI-related components and services, which have bolstered manufacturing and export activity. Electronics production, a key driver of Singapore’s economy, benefited from increased orders tied to data center infrastructure and semiconductor demand.

The government maintained its 2024 growth forecast at 2.0% to 3.0%, reflecting confidence in the current economic trajectory despite global headwinds. Trade and Industry Minister Gan Kim Yong noted that while external demand remains uncertain, domestic resilience and AI-driven sectors provide a buffer against weaker external conditions.

Analysts said the upward revision signals confidence in Singapore’s ability to navigate a challenging global environment while capitalizing on structural shifts in technology demand. The city-state’s open economy, heavily reliant on trade and advanced manufacturing, has shown signs of adapting to changing global supply chains.

The Monetary Authority of Singapore is expected to maintain its accommodative policy stance in the near term, given the mixed outlook for inflation and growth. The central bank’s next policy review is scheduled for October.