Post by Ministry of Trade and Industry (Singapore)

In the first quarter of 2026, the Singapore economy grew by 6.0 per cent on a year-on-year basis.     In February, MTI upgraded Singapore’s GDP growth forecast for 2026 to “2.0 to 4.0 per cent”, from “1.0 to 3.0 per cent”. The upgrade came on the back of the strong growth momentum in the fourth quarter of 2025, largely due to the AI investment boom which was expected to be sustained into 2026. At the same time, expansionary fiscal policies in major economies and accommodative global financial conditions were expected to support global growth.     Since then, the global economic outlook has deteriorated with the onset of the US-Israel-Iran conflict. Disruptions to the supply of energy and other key inputs due to the blockade of the Strait of Hormuz have led to increased energy and other input costs. In turn, this has driven up inflationary pressures and is expected to weigh on global economic activity for the rest of the year. On the other hand, AI-related demand has remained robust and should continue to support the growth of regional economies throughout the year.    Downside risks to the global economy have also risen significantly since February. These include a prolonged disruption to the global supply of energy and other inputs due to the conflict in the Middle East, a re-escalation in US tariff actions and a sudden pullback in global AI-related capital spending.      On balance, taking into account the latest global and domestic economic developments, MTI’s assessment is that the outlook for the Singapore economy in 2026 has weakened since February. However, in view of the better-than-expected performance of the Singapore economy in the first quarter, Singapore’s GDP growth forecast for 2026 is maintained at “2.0 to 4.0 per cent”. Nonetheless, downside risks to Singapore’s economic outlook have risen significantly and MTI will continue to monitor developments closely and adjust the GDP growth forecast over the course of the year if necessary.   Read the full report here: https://lnkd.in/gum7S2k8