Singapore has decided to keep its 2026 economic growth forecast unchanged at 2-4%, as announced by the Ministry of Trade and Industry (MTI). The country experienced a 6% year-on-year economic growth in the first quarter, driven by strong performances in wholesale trade, manufacturing, and finance and insurance sectors. The growth was supported by robust demand in artificial intelligence (AI)-related industries.
Despite the positive growth, Singapore faced challenges due to higher prices and shortages of crude oil and related products resulting from the US-Israel-Iran conflict. This led to contractions in certain sectors like fuels and chemicals. The MTI had previously revised its 2026 growth forecast upwards in February, anticipating momentum from AI investments and expansionary fiscal policies in major economies to continue into 2026.
The global economic outlook has weakened following the outbreak of the conflict, impacting various sectors. However, AI-related demand remains strong and is expected to support regional economies throughout the year. The International Monetary Fund (IMF) projected Singapore’s economic growth to slow down to 3.5% in 2026 and 2.7% in 2027, attributing this to the Middle East conflict’s effects on energy prices and global supply chains.
