Singapore: Strong growth momentum defies risks – DBS

DBS Group Research economist Chua Han Teng highlights that Singapore’s economy is set to deliver above-trend growth for a third straight year in 2026, supported by manufacturing, wholesale trade and financial services. Following a robust 2Q26 performance and the ongoing global AI boom, DBS raises its 2026 real GDP growth forecast to 5.0%, noting MTI’s upgraded official projection and lingering geopolitical challenges.

Above-trend expansion driven by AI

"Singapore’s economic growth was robust in 2Q26, as confirmed by the Ministry of Trade and Industry (MTI). GDP growth was revised up to 5.9% yoy and 1.4% qoq sa, in line with our expectations."

"The modest upward revision from the advance estimates of 5.7% yoy and 1.1% qoq sa reflected firmer expansion in the manufacturing and services sectors. Growth was driven by the strong performance of manufacturing, wholesale trade, and finance & insurance sectors."

"We are raising our 2026 GDP growth forecast to 5.0%, from 4.3%, on the back of strong 1H26 performance, and the likely persistence of the global artificial intelligence (AI) boom."

"This is despite ongoing geopolitical challenges, and a moderation in the overall GDP cycle due partly to high base effects."

"MTI also further upgraded its official 2026 GDP growth projection to 4.5%-5.5%, from 2.0-4.0%, considering the improved external demand outlook, despite continuing to acknowledge downside risks to the global economy."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)