{"slug": "singapore-raises-2026-growth-forecast-to-4-5-5-5-q2-growth-revised-up-to-5-9", "title": "Singapore raises 2026 growth forecast to 4.5-5.5%; Q2 growth revised up to 5.9%", "summary": "Singapore's Ministry of Trade and Industry (MTI) raised its 2026 economic growth forecast to 4.5-5.5% from 2-4%, citing an accelerating global AI investment boom. The economy expanded 6.1% year-on-year in the first half of 2026, with Q2 GDP growth revised up to 5.9% from an advance estimate of 5.7%, driven by manufacturing, wholesale trade, and finance & insurance sectors.", "body_md": "# Singapore raises 2026 growth forecast to 4.5-5.5%; Q2 growth revised up to 5.9%\n\nThe economy expanded 6.1 per cent year-on-year in the first-half of 2026\n\n[SINGAPORE] The government has upgraded its 2026 economic growth forecast for Singapore to a range of 4.5 to 5.5 per cent – up from the previous forecast of 2 to 4 per cent – as an accelerating global boom in artificial intelligence (AI) investment lifts the trade-reliant economy’s prospects for the rest of the year.\n\nThe revision, announced by the Ministry of Trade and Industry (MTI) on Tuesday (Aug 11) morning, comes on the back of a better-than-expected first half of 2026, during which the economy expanded 6.1 per cent year-on-year.\n\nIn the second quarter alone, gross domestic product (GDP) grew 5.9 per cent from a year earlier, easing slightly from the 6.3 per cent pace notched in the first quarter – but still comfortably ahead of the growth path the ministry had pencilled in earlier this year.\n\nOn a quarter-on-quarter seasonally adjusted basis, the economy grew 1.4 per cent in the second quarter, extending the 1.2 per cent expansion in the first three months of the year.\n\nThe final figure marks an upward revision from the advance estimate of 5.7 per cent. The 0.2 percentage point upgrade reflects stronger-than-initially-measured output in the manufacturing and services sectors once more complete survey data came in.\n\n## Manufacturing and finance lead the way\n\nGrowth in the second quarter was underpinned by the manufacturing, wholesale trade, and finance & insurance sectors, MTI said.\n\nManufacturing output surged 12.5 per cent year-on-year, driven largely by the electronics and precision engineering clusters, as robust global demand for AI-related semiconductors, including networking and memory chips, fed through to production lines here.\n\nThe wholesale trade sector expanded 8.3 per cent, buoyed by the machinery, equipment and supplies segment, while finance & insurance grew 6.2 per cent on the back of strong credit growth and fee income in the banking segment, alongside double-digit growth in fund management fees and commissions.\n\nThe food & beverage services sector was the notable laggard, contracting 1.5 per cent year-on-year as a pickup in outbound travel by residents and softer visitor arrivals weighed on local spending.\n\n## AI tailwind outweighs Middle East risks\n\nMTI attributed the upgrade to two offsetting global forces. On one hand, the fallout from the US-Israel-Iran conflict – which had prompted the ministry to hold its forecast steady in May – has proven less severe than initially feared.\n\nWhile the blockade of the Strait of Hormuz disrupted global energy and intermediate input supplies, a drawdown of oil inventories and a shift to alternative energy sources have kept a lid on prices, the ministry said.\n\nOn the other hand, the global AI investment boom has been stronger than expected, providing what MTI described as “significant tailwinds” to AI-related production and exports worldwide – a trend it expects to intensify in the second half of the year.\n\nThe improved external backdrop has also lifted growth forecasts for regional peers.\n\nMTI noted that 2026 GDP forecasts for Taiwan and South Korea have been raised on the back of their AI-linked export exposure, as have those for most key Southeast Asian economies.\n\nChina’s outlook, by contrast, remains broadly unchanged, with growth there expected to slow in the second half amid easing export growth and soft domestic consumption.\n\nMTI flagged three downside risks that could still derail the improved outlook – a further escalation of the Middle East conflict that reignites energy price spikes; additional US tariff actions that dent business and household sentiment; and a sharp correction in financial markets should investor enthusiasm for AI-related capital spending sour.\n\nDomestically, sectors tied to the AI-driven technology cycle – electronics, precision engineering, and information and communications – are expected to see an improved outlook for the rest of the year.\n\nThose exposed to Middle East-related supply disruptions, such as chemicals and the water and air transport segments, are likely to stay under pressure from elevated fuel and feedstock costs.\n\nConsumer-facing sectors such as retail trade and food & beverage services may continue to feel the pinch from dampened sentiment amid inflationary pressures, though government support measures such as the Community Development Council (CDC) Vouchers are expected to cushion some of the impact, MTI said.\n\nDecoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.\n\nCopyright SPH Media. All rights reserved.", "url": "https://wpnews.pro/news/singapore-raises-2026-growth-forecast-to-4-5-5-5-q2-growth-revised-up-to-5-9", "canonical_source": "https://www.businesstimes.com.sg/singapore/singapore-raises-2026-growth-forecast-4-5-5-5-q2-growth-revised-5-9", "published_at": "2026-08-11 00:03:11+00:00", "updated_at": "2026-08-11 00:05:01.712666+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-policy"], "entities": ["Ministry of Trade and Industry (MTI)", "Singapore", "Taiwan", "South Korea", "China"], "alternates": {"html": "https://wpnews.pro/news/singapore-raises-2026-growth-forecast-to-4-5-5-5-q2-growth-revised-up-to-5-9", "markdown": "https://wpnews.pro/news/singapore-raises-2026-growth-forecast-to-4-5-5-5-q2-growth-revised-up-to-5-9.md", "text": "https://wpnews.pro/news/singapore-raises-2026-growth-forecast-to-4-5-5-5-q2-growth-revised-up-to-5-9.txt", "jsonld": "https://wpnews.pro/news/singapore-raises-2026-growth-forecast-to-4-5-5-5-q2-growth-revised-up-to-5-9.jsonld"}}