Singapore Maintains 2026 Growth Forecast Amid AI Boom

The Ministry of Trade and Industry of Singapore maintained its 2026 economic growth forecast at 2% to 4% on May 25, 2026, despite a stronger-than-expected first-quarter performance. The economy grew 6% year-on-year in the first quarter, driven by an investment boom in artificial intelligence and strong performances in manufacturing, wholesale trade, and finance. Industrial production further surged 17.6% in April, the fastest pace in six months, with the electronics sector expanding 44% due to demand for AI semiconductors.

Enterprise Singapore upgraded its 2026 growth forecast for non-oil domestic exports (NODX) to 3-5%, noting a 57.8% surge in electronics shipments during the first quarter. Private economists reacted more optimistically; Maybank Investment Bank raised its 2026 GDP forecast to 4.2%, and UOB Global Economics and Markets Research increased its projection to 3.2%.

Despite these gains, officials flagged significant downside risks. The conflict in the Middle East and the blockade of the Strait of Hormuz have disrupted oil and chemical feedstock supplies, causing inflation and hurting the chemicals cluster, which declined 17.6% in April. In response to these inflationary pressures, the Monetary Authority of Singapore tightened monetary policy and raised its 2026 inflation forecasts. Permanent Secretary Beh Swan Gin noted that the overall economic outlook has weakened since February.