- Singapore's second-quarter GDP grew 5.9% year-on-year, driven by manufacturing, wholesale trade, and finance and insurance sectors.
- The government revised its annual growth forecast sharply higher, citing an AI-related boost and less damaging fallout from the Iran war.
- Enterprise Singapore upgraded its forecast for non-oil domestic exports growth to 14% to 16% from 3% to 5%.
- The Monetary Authority of Singapore (MAS) tightened policy in late July and raised 2026 inflation forecasts to 1.5%-2.5%.
- The strong performance is likely to offer some room for the Monetary Authority of Singapore (MAS) to act against inflation.
- First-half GDP growth was 6.1%, and on a quarter-on-quarter seasonally adjusted basis, GDP expanded 1.4% in April-June.
- Singapore's core inflation rose to 1.6% in June from 1.4% in May, near the bottom of the MAS' 1.5%-2.5% forecast range.
Singapore's Ministry of Trade and Industry (MTI) has upgraded its growth forecast for 2026 to 4.5%-5.5%, more than double the previous estimate of 2%-4%, following a 5.9% GDP expansion in the second quarter, which exceeded initial estimates of 5.7%.1
The growth was primarily driven by the manufacturing, wholesale trade, and finance and insurance sectors. The ministry noted that the AI boom and a surge in exports significantly contributed to this robust performance. “The global economy has remained more resilient than expected, bolstered by the sustained AI-related demand and capex spending,” stated Enterprise Singapore.
For the first half of the year, Singapore's GDP growth was reported at 6.1%. The MTI also highlighted that the fallout from the U.S.-Iran conflict was less severe than anticipated, allowing for a more optimistic outlook. “With the fog of war lifting and oil prices well below their highs, the economy looks set to keep sailing in the second half,” said Maybank economist Chua Hak Bin.67
Despite the positive outlook, the Monetary Authority of Singapore has flagged the sustainability of the AI investment boom as a potential risk, while also tightening monetary policy in response to persistent inflationary pressures. The core inflation rate rose to 1.6% in June, nearing the MAS' forecast range of 1.5%-2.5% for the year.48
Overall, the strong performance in Q2 and the AI-driven growth trajectory suggest that Singapore's economy is poised for continued expansion in the latter half of 2026.
“The upgrade comes as core inflation rose to 1.6% in June from 1.4% in May, near the bottom of MAS's 1.5%-2.5% range. The central bank tightened policy in late July, citing persistent inflationary risks from the Middle East conflict.”
CNBC
The Edge Malaysia
