Singapore raises 2026 growth forecast on AI demand

Singapore raised its forecast for 2026 economic growth on Tuesday, saying global demand linked to artificial intelligence was boosting activity.

Gross domestic product is now expected to expand by 4.5% to 5.5% year on year in 2026, up from an earlier forecast of 2.0% to 4.0%, the government said.

The Ministry of Trade and Industry said the revision reflected stronger first-half performance and a better outlook for the rest of the year because of rising global AI-related capital expenditure.

The ministry said second-quarter growth was driven by manufacturing, wholesale trade, and the finance and insurance sectors. It said AI-related demand helped electronics and precision engineering in manufacturing, as well as machinery, equipment and supplies in wholesale trade.

Singapore's government has said AI-related global demand is expected to help cushion the city state's economy from the impact of war in the Middle East. It said AI investment had been stronger than expected, while the Iran war's impact on the wider global economy had been less severe than initially feared.