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Singapore raises 2026 GDP growth forecast

Official data released by MTI show that the country’s GDP grew 5.9% year-on-year in the second quarter, easing from 6.3% in the first quarter. On a quarter-on-quarter seasonally adjusted basis, the economy expanded by 1.4%, extending the 1.2% growth in the first quarter.

A petrol station in Singapore (Photo: Xinhua/VNA)
A petrol station in Singapore (Photo: Xinhua/VNA)

Singapore (VNA) – Singapore’s GDP growth is projected to grow 4.5-5.5% in 2026, significantly higher than the previous forecast of 2-4%, driven by stronger-than-expected growth in the first half of the year, according to the Ministry of Trade and Industry (MTI).

Official data released by MTI show that the country’s GDP grew 5.9% year-on-year in the second quarter, easing from 6.3% in the first quarter. On a quarter-on-quarter seasonally adjusted basis, the economy expanded by 1.4%, extending the 1.2% growth in the first quarter.

The stronger-than-expected first-half performance prompted MTI to sharply raise its full-year growth forecast. The upgrade reflects the ministry’s assessment that momentum from the technology and AI cycle could significantly offset adverse impacts from the Middle East conflict and the global trade environment.

MTI said that since its previous forecast in May, global investment in AI has grown more strongly than anticipated, providing a significant boost to the global production and exports of AI-related products. For the remainder of 2026, AI investment spending is expected to accelerate further, improving growth prospects for economies deeply integrated into global technology value chains.

On a year-on-year basis, Singapore's GDP growth in the second quarter was driven by the strong performance of the manufacturing, wholesale trade and finance and insurance sectors. In particular, robust global AI-related demand boosted growth in the electronics and precision engineering clusters of the manufacturing sector, as well as the machinery, equipment and supplies segment of the wholesale trade sector.

Meanwhile, growth in the finance and insurance sector was driven by the banking segment on the back of strong credit growth and fee-generating activities. By contrast, the food and beverage services sector contracted, partly due to a sustained increase in outbound travel by locals and a decline in visitor arrivals during the quarter.

In May, MTI maintained Singapore’s GDP growth forecast for 2026 at 2 – 4 %, based on the expectation that global AI-related demand will cushion the impact of the Middle East conflict on the global economy./.

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