Singapore GDP forecast raised to 5% as AI demand drives growth surge

Private-sector economists have sharply raised their 2026 growth forecast for Singapore to 5%, up from 3.5% previously, driven by surging demand for AI-related electronics and manufacturing output. The revised forecast, published in the Monetary Authority of Singapore's latest quarterly survey, puts the projection at the upper end of the Ministry of Trade and Industry's official range of 4.5% to 5.5%.

The upgrade follows a stronger-than-expected second quarter, in which the Singapore economy grew 5.9% year-on-year — well above the 4.3% that respondents had previously forecast for the quarter. The AI boom has been a key driver, with global demand for semiconductors and data centre infrastructure pushing Singapore's non-oil domestic exports to their sharpest surge in over two decades. Twenty-one economists and analysts responded to the MAS survey.

Not all respondents are optimistic about the trajectory. The survey noted that more economists now see an AI bubble as a top risk to the outlook, reflecting concerns about whether current investment levels in AI infrastructure are sustainable. The Middle East conflict and potential US tariff escalation also feature as downside risks, though the consensus remains firmly bullish on Singapore's near-term growth prospects.

Why it matters for Singapore: A 5% GDP growth rate is extraordinary for a mature economy like Singapore, and it underscores how deeply the AI supply chain has embedded itself in the city-state's economic fabric. For policymakers, the challenge is clear: maintain the AI investment momentum while managing bubble risks and ensuring that growth translates into broad-based wage gains rather than concentrating in the tech and manufacturing elite. The MAS survey results will likely reinforce the government's confidence in its AI-first industrial strategy.