SINGAPORE, Aug. 11 (Xinhua) -- The Singaporean government on Tuesday raised the country's 2026 economic growth forecast to 4.5 percent to 5.5 percent, from the previous 2 percent to 4 percent, citing a better-than-expected performance in the first half of the year and an improved outlook for the rest of the year.
The upgrade also reflects an acceleration in global artificial intelligence (AI)-related capital expenditure, the Ministry of Trade and Industry said in a statement.
Singapore's gross domestic product (GDP) grew 6.1 percent year-on-year in the first half of 2026.
The economy expanded 5.9 percent year-on-year in the second quarter, slowing from 6.3 percent growth in the previous quarter. Growth was driven by the manufacturing, wholesale trade, and finance and insurance sectors.
Robust global demand related to AI boosted activity in the electronics and precision engineering clusters of the manufacturing sector, as well as the machinery, equipment and supplies segment of wholesale trade, the ministry said.
Since the ministry last maintained its 2026 growth forecast at 2 percent to 4 percent in May, the global AI investment boom has been stronger than expected, providing "significant tailwinds to AI-related production and exports globally," it said.
However, downside risks to the global economy remain, including those from the conflict in the Middle East, additional U.S. tariff actions, and a sudden shift toward risk aversion in financial markets over global AI-related capital spending, the ministry said.
"Against this backdrop, the 2026 outlook for sectors of the Singapore economy that are linked to the AI-driven technology cycle has improved, although that for sectors directly affected by supply disruptions arising from the Middle East conflict remains weak," it said. ■
