SINGAPORE, Aug. 12 (Xinhua) -- Singapore's economy is on track to outperform earlier expectations in 2026, with major research houses raising their growth forecasts as the global artificial intelligence (AI) boom continues to fuel technology exports and manufacturing.
UOB Global Economics and Markets Research has raised its 2026 gross domestic product (GDP) growth forecast to 5 percent, from 4.8 percent previously, citing continued AI-related tailwinds in the second half of the year. However, it expects momentum in the semiconductor and electronics sectors to moderate.
UOB expects GDP growth of 0.5 percent quarter-on-quarter on a seasonally adjusted basis in both the third and fourth quarters, translating into 4 percent year-on-year growth in the second half, compared with 6.1 percent in the first half.
DBS Group Research has also lifted Singapore's 2026 growth forecast to 5 percent from 4.3 percent, following stronger-than-expected first-half performance and expectations that the global AI boom will persist. The upgrade comes despite geopolitical risks and a moderation in the broader economic cycle due partly to high base effects.
Denise Cheok, head of Southeast Asia Economics at Moody's Analytics, said Singapore's economy had proved more resilient than expected, largely because of a surge in technology exports linked to the AI boom.
Beyond cutting-edge chips used in graphics processing units, she said demand for other electronic components produced in Singapore and elsewhere had also benefited from the broader increase in technology-related demand.
U.S. tariffs and the conflict in the Middle East could derail growth in the second half of the year, but given the current growth trajectory, this seems increasingly unlikely, she added.
Nomura Global Markets Research was more bullish, raising its 2026 GDP growth forecast to 5.7 percent, from 4.6 percent. It expects growth to remain strong at 5.3 percent in the second half, following 6.1 percent growth in the first half.
Nomura said the global technology uptrend and broadening AI-related demand should continue to support electronics manufacturing, alongside new capacity.
Trade-related services, financial services and construction are also expected to contribute to growth. Financial services could benefit from stronger credit growth, while construction should be supported by major projects and a resilient property market. ■
