Singapore Raises Growth Forecast to as High as 5.5% on AI Boom

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessSingapore Raises Growth Forecast to as High as 5.5% on AI BoomSingapore upgraded its 2026 economic growth forecast anew as the artificial intelligence boom lifts trade, offsetting the drag from continued fighting in the Middle East.Author of the article:Srinidhi Ragavendran and Claire JiaoLast updated 23 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.The Merlion statue in the central business district of Singapore Photographer: Lionel Ng/Bloomberg Photo by Lionel Ng /Bloomberg(Bloomberg) — Singapore upgraded its 2026 economic growth forecast anew as the artificial intelligence boom lifts trade, offsetting the drag from continued fighting in the Middle East.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountGross domestic product is expected to come in at 4.5%-5.5% this year, the Ministry of Trade and Industry said on Tuesday, raising the 2%-4% estimate it set back in February before the outbreak of the war in Iran. It’s the second upward revision to the growth outlook, which was initially set at 1%-3% last year.The move comes as GDP grew 5.9% in the second quarter, above the government’s advance estimate of 5.7% and the median 5.8% forecast in a Bloomberg survey. It eased from the 6.3% notched in the January-March period.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“The global AI investment boom has been stronger than expected,” MTI said in a statement. “For the rest of the year, a further acceleration in AI-related capital expenditure is expected to lift the growth prospects of economies plugged into the global technology value chain.”The Singapore dollar was little changed at 1.2803 versus the greenback after the data release.The trade-reliant city-state has found itself in the crosswinds of both the tech boom and the impact of the Iran war. The surge in global AI investment has lifted technology-related exports, while the spike in crude costs has hit energy-intensive sectors.Manufacturing and wholesale trade were the main growth drivers last quarter, expanding 12.5% and 8.3%, respectively, as robust AI demand lifted Singapore’s electronics, precision engineering and machinery sectors.Strong credit growth also helped boost finance and insurance. All services sectors expanded except for food and beverage, which shrank 1.5% last quarter, partly due to a decline in visitor arrivals.“The economic impact of the conflict in the Middle East has also been less severe than initially feared,” the ministry said in the statement, adding that the drawdown of oil inventories and substitution to alternative energy sources have capped the rise in global energy prices.However, energy prices are expected to remain elevated in the second half of the year on the back of continuing tensions in the Middle East, alongside lower levels of global oil inventories.In anticipation, the government has nearly doubled its support package, including cash vouchers, grants and rental assistance, to help households and businesses defray higher costs.The MAS has also delivered back-to-back policy tightening to contain rising price pressures, warning that inflation is likely to pick up from July and stay elevated through mid-2027.Prime Minister Lawrence Wong on Saturday said Singapore’s growth momentum is expected to continue. The premier said the city-state has benefitted from the rapid growth of AI while the broader geopolitical environment remains uncertain.On a seasonally adjusted basis, the economy grew 1.4% from the previous quarter, beating the 1.2% estimate.“On balance, taking into account these developments and the GDP performance of the various economies in the second quarter, Singapore’s external demand outlook for the year has improved compared to the assessment in May,” the ministry said.—With assistance from Benjamin Liu.(Updates with market moves and chart.)This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.