SINGAPORE, July 2 (Xinhua) -- Major research houses have raised their growth forecasts for Singapore, citing resilient economic activity, sustained artificial intelligence (AI)-related investment and a construction boom, while easing tensions in the Middle East have reduced downside risks to the export-dependent economy.
DBS Group Research raised its forecast for Singapore's real gross domestic product (GDP) growth to 4.3 percent in 2026 and 3 percent in 2027, from 2.8 percent and 2.3 percent, respectively.
"De-escalation of U.S.-Iran tensions reduces stagflationary forces and downside growth risks. Sustained global AI cycle, financial services momentum and construction boom underpin the positive outlook," DBS said.
The research house said Singapore's economy had remained resilient despite geopolitical shocks stemming from the conflict in the Middle East and likely ended the first half of the year on a strong footing, providing positive momentum for the remainder of 2026.
Maybank Investment Bank also said it expects Singapore's GDP to grow 4.6 percent in 2026, above the government's official forecast range of 2 percent to 4 percent.
The bank said the impact of the Gulf conflict on growth and inflation had been limited, adding that strong first-quarter GDP growth of 6 percent supported its upgraded outlook.
According to Maybank, robust global AI capital expenditure and a construction boom are helping offset headwinds from higher energy prices and supply disruptions linked to the Middle East.
Separately, UOB Global Economics and Markets Research raised its 2026 Singapore GDP growth forecast to 4 percent from 3.2 percent, saying AI-related tailwinds are likely to persist at least through the third quarter.
UOB projected second-quarter GDP growth of 0.6 percent quarter-on-quarter and 5 percent year-on-year.
The research house added that easing tensions in the Middle East and a gradual normalization of energy flows through the Strait of Hormuz have reduced downside risks to Singapore's growth outlook. ■