Singapore has raised its economic growth forecast for 2026 after the economy performed better than expected in the first half of the year, with stronger global spending on artificial intelligence also improving the outlook.
The Ministry of Trade and Industry (MTI) said on 11 August that Singapore’s 2026 GDP growth forecast has been upgraded to between 4.5% and 5.5%, up from its previous forecast of 2% to 4%.
The upgrade comes as the Singapore economy continues to record strong growth despite ongoing uncertainties in the global economy.
Singapore Economy Grows 5.9% In Second Quarter
Singapore’s economy expanded by 5.9% year-on-year in the second quarter of 2026, according to MTI.
While this was slightly slower than the 6.3% growth recorded in the first quarter, the economy continued to expand on a quarterly basis.
On a quarter-on-quarter seasonally adjusted basis, Singapore’s GDP grew by 1.4% in the second quarter, following growth of 1.2% in the first quarter.
For the first six months of 2026, Singapore’s economy recorded overall growth of 6.1% year-on-year.
The stronger-than-expected performance during the first half of the year was one of the key factors behind MTI’s decision to raise its full-year forecast.
AI Investment Boosts Economic Outlook
MTI said the improved outlook for the remainder of 2026 was also supported by an acceleration in global capital expenditure related to artificial intelligence.
The rapid expansion of AI technologies has led companies around the world to increase spending on areas such as computing infrastructure, semiconductors and other technology-related investments.
Singapore’s position as a major regional business, manufacturing and technology hub could benefit from this increased investment activity.
The stronger global demand is expected to support Singapore’s trade-related sectors and contribute to economic activity during the rest of the year.
Growth Forecast Raised By Up To 2.5 Percentage Points
The latest forecast represents a significant improvement from MTI’s earlier outlook.
At the start of the year, Singapore’s GDP growth was projected to be between 2% and 4%. The new forecast of 4.5% to 5.5% means the lower end of the range has increased by 2.5 percentage points, while the upper end has risen by 1.5 percentage points.
The revision also comes after Singapore recorded 6.1% growth during the first half of 2026.
MTI’s latest assessment suggests that the economy is on track for another year of relatively strong expansion, although the final outcome will continue to depend on global economic conditions and developments in international trade and investment.
For businesses and households in Singapore, stronger GDP growth could translate into continued economic activity, although the impact on individual incomes, hiring and household costs will vary across sectors.
Singapore’s economic performance will continue to be closely watched in the second half of 2026 as global AI investment, trade conditions and other external factors shape the country’s growth trajectory.