Singapore: AI-driven growth supports MAS outlook – Standard Chartered

Standard Chartered Bank economists Edward Lee and Jonathan Koh highlight that Singapore’s H1 GDP expanded 6.1% year-on-year, with strong AI-related demand offsetting energy sector drag. The government lifted its 2026 growth forecast to 4.5-5.5%, while Standard Chartered raised its own 2026 GDP forecast to 4.9% from 3.9%. They expect more moderate H2-2026 growth due to electronics base effects.

AI sectors underpin robust expansion

"Singapore continued to grow at a very fast pace of 5.9% y/y in Q2; H1 GDP grew by 6.1% y/y."

"With the strong H1 growth outturn, the government has raised its 2026 growth forecast to 4.5-5.5% from 2-4%. For H2-2026, we expect more moderate growth, partly driven by less-favourable base effects in the electronics sector. We raise our 2026 GDP growth forecast to 4.9% from 3.9%."

"AI-related demand provided the main growth boost, while the oil-related drag had less of an impact than expected."

"On an expenditure basis, investments are driving overall GDP activity. In particular, private investment in machinery and equipment contributed 1ppt to H1 GDP growth."

"Exports continued to increase at a double-digit pace though higher imports meant that net exports subtracted slightly from overall Q2 GDP growth."

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