Singapore 2026 Growth Forecasts Raised to 4.8% as AI Demand Holds Up

UOB and S&P Global Market Intelligence raised their forecasts for Singapore’s 2026 economic growth to 4.8% after a stronger-than-expected first half (January–June CY26). The upgrades reflect continued AI-related demand for electronics manufacturing, even as the Middle East conflict adds new risks to the outlook, according to research notes reported by Xinhua.

The revisions followed advance estimates from the Ministry of Trade and Industry (MTI) on July 14, showing gross domestic product grew 5.7% year on year in the second quarter (April–June), slowing from 6.3% in the previous quarter.

Manufacturing moved in the opposite direction, though, expanding 12.2% year on year in the April–June quarter, up from 8% YoY in the previous quarter, as demand for semiconductors and chip-making equipment lifted electronics and precision engineering output.

Where the Forecasts Now Stand

UOB: 4% → 4.8%
S&P Global Market Intelligence: 4.8%, revised up
Nomura: 4.6%, with upside risk flagged
Consensus: 3.4%
MTI official range: 2–4%

Source: MTI advance estimates, July 14, 2026; research house revisions as reported.

The Singapore dollar was marginally weaker at S$1.294 per US dollar after the release. The figures came less than three weeks before the Monetary Authority of Singapore‘s next policy review, due by July 31. MAS tightened policy in April by slightly increasing the rate of appreciation of its exchange-rate band and raised both its core and headline inflation forecasts for 2026 to 1.5–2.5%, complicating the case for an easing move while growth remains strong.

UOB lifted its full-year forecast from 4% and said the momentum from AI-related demand was likely to carry into the third quarter. Singapore’s electronics purchasing managers’ index rose 0.3 points to 52.2 in June, as new export orders, purchase inventories, employment and order backlogs improved. The higher ratio of orders to inventories suggests manufacturers are drawing down stocks to meet demand, which should support growth in electronics production in the coming months.

Nomura retained its 4.6% projection but said the first-half performance presented upside risk to that estimate. Its forecast is already above MTI’s official range of 2–4% and a consensus estimate of 3.4%. The bank expects AI-related demand to spread across more parts of the economy, while a global semiconductor “super cycle” may support electronics exports, manufacturing and trade-linked sectors.

S&P expects the electronics upcycle to feed beyond factories and precision engineering into machinery-related wholesale trade and logistics. Growth should also continue to draw support from information technology, banking, insurance and professional services, while construction is expected to remain positive despite losing some momentum.

But the stronger outlook comes with a significant external risk. The Middle East conflict intensified again in July after Iran declared the Strait of Hormuz closed “until further notice” and the US struck more than 300 Iranian military targets over three nights, the latest round coming after an Iranian attack on a container ship in the strait.

Washington launched another wave of strikes on July 15, saying it was targeting capabilities used to attack commercial shipping. S&P expects intermittent exchanges to continue, leaving shipping risks around the waterway elevated.

The effects are already visible in Singapore’s industrial data. The chemicals cluster contracted in the second quarter because the conflict disrupted feedstock supplies, according to MTI. The ministry had warned in May that downside risks to its 2–4% growth forecast had risen significantly because of the conflict. S&P expects continued disruption to put pressure on hydrocarbon-linked feedstock, freight rates, insurance costs and imported input prices.

UOB warned that another escalation could drive energy prices sharply higher and prompt further monetary tightening. Coupled with a correction in highly valued AI-related equities, that could cause companies to delay capital expenditure and weaken the electronics cycle underpinning the forecast upgrades.

For a trading, logistics and re-exporting hub that imports its energy, the very openness powering Singapore’s upgrade is also its exposure.