Singapore upgrades 2026 growth forecast to 4.5%-5.5% on stronger AI boom; Q2 GDP expands 5.9% year-on-year

Singapore's Ministry of Trade and Industry (MTI) has significantly raised its 2026 economic growth forecast to 4.5%-5.5%, up from a previous estimate of 2%-4%. This adjustment reflects the impact of a global AI investment boom that has exceeded expectations, providing substantial support to AI-related production and exports.¹²⁵

In the second quarter of 2026, Singapore's economy grew by 5.9% year-on-year, a slight decrease from the 6.3% growth recorded in the previous quarter. On a quarter-on-quarter basis, the economy expanded by 1.4%, building on the 1.2% growth seen in Q1.³

For the first half of 2026, Singapore's gross domestic product (GDP) growth stood at 6.1% year-on-year. The growth in Q2 was primarily driven by strong performances in the manufacturing, wholesale trade, and finance and insurance sectors. Notably, robust global demand for AI-related products significantly boosted growth in the electronics and precision engineering clusters of manufacturing, as well as the machinery, equipment, and supplies segment of wholesale trade.⁴

Conversely, the food and beverage services sector experienced a contraction, attributed to increased outbound travel by locals and a decline in visitor arrivals during the quarter. The finance and insurance sector's expansion was largely driven by strong credit growth and fee-generating activities in banking.