Singapore raises 2026 GDP forecast

Singapore's economy grew by 5.9 percent in the second quarter of 2026, exceeding initial estimates of 5.7 percent. The Trade Ministry announced an upgraded growth forecast for the year, ranging from 4.5 to 5.5 percent, from the previous 2.0 to 4.0 percent. The ministry attributed the improvement to the lesser severity of the Middle East war's impact and a stronger global AI investment boom than anticipated.

On a quarter-on-quarter basis, the GDP expanded by 1.4 percent in the April-June period, surpassing the earlier 1.1 percent estimate. Enterprise Singapore also revised its growth forecast for non-oil domestic exports this year, increasing it to 14 to 16 percent from the previous 3 to 5 percent. The global economy has proven more resilient than expected due to sustained AI-related demand and capital expenditure spending.

However, downside risks include the Iran war and new US tariffs. The Monetary Authority of Singapore expects growth to remain robust throughout 2026, though it has warned about the sustainability of the AI investment boom as a significant risk. The central bank unexpectedly raised interest rates in late July, citing persistent inflationary risks amid high energy costs due to the Middle East conflict.

The government also announced a S$900 million support package to assist households and businesses in coping with soaring energy prices.