Singapore Raises 2026 Growth Forecast to 5.5 Percent

The Ministry of Trade and Industry raised Singapore's 2026 economic growth forecast to between 4.5% and 5.5%, a significant increase from the February estimate of 2% to 4%. This upgrade follows second-quarter GDP growth of 5.9%, which was driven by a global artificial intelligence investment boom that increased exports in machinery, precision engineering, and electronics. Manufacturing and wholesale trade grew by 12.5% and 8.3% respectively.

Despite this momentum, the economy faced headwinds from high crude costs linked to conflict in the Middle East. The government responded by nearly doubling its support package for businesses and households to mitigate these costs. To address inflation, which is expected to remain elevated through mid-2027, the Monetary Authority of Singapore implemented consecutive policy tightenings.

Prime Minister Lawrence Wong stated that growth momentum is expected to continue despite an uncertain geopolitical environment. The Ministry of Trade and Industry noted that the economic impact of Middle East conflicts was less severe than initially feared and expects further AI-related capital expenditure to lift growth prospects for economies in the global technology value chain.