Singapore has raised its economic growth forecast for 2026, driven by strong demand for artificial intelligence (AI) products and resilient global trade despite rising trade tensions.
The Ministry of Trade and Industry said on Tuesday that the economy is now expected to grow by between 2.0 and 4.0 percent this year, up from an earlier forecast of 1.0 to 3.0 percent.
The upgraded outlook follows a strong performance in 2025, when the economy expanded by 5.0 percent, beating earlier estimates of 4.8 percent. Growth was supported by a strong final quarter of the year.
According to the ministry, the global economy performed better than expected in late 2025, with major economies recording stronger growth. This momentum is expected to carry into 2026.
Global trade has also remained steady despite new US tariffs introduced under President Donald Trump. Officials said the impact was softened by lower-than-expected effective tariff rates and adjustments by countries trading around the restrictions.
Singapore has benefited significantly from the global AI investment boom. As a key hub for high-end electronics manufacturing, the country has seen increased production of semiconductors, memory chips, and server components used in data centres that power AI systems.
The city-state’s role as a regional financial and digital hub has also helped attract investments in AI software and infrastructure.
The ministry added that continued AI investments, expansionary government spending in countries such as the United States, Germany, and Japan, and supportive global financial conditions are expected to support growth in the coming months.
However, officials cautioned that economic growth in many major economies may slow later in the year due to the full impact of US tariffs and rising global trade barriers, particularly affecting sectors not linked to AI.
Singapore, which relies heavily on international trade, remains vulnerable to any major slowdown in the global economy.
