Singapore: Strong growth momentum defies risks – DBS

DBS Group Research economist Chua Han Teng highlights that Singapore’s economy is set to deliver above-trend growth for a third straight year in 2026, supported by manufacturing, wholesale trade and financial services. Following a robust 2Q26 performance and the ongoing global AI boom, DBS raises its 2026 real GDP growth forecast to 5.0%, noting MTI’s upgraded official projection and lingering geopolitical challenges.

Above-trend expansion driven by AI

"Singapore’s economic growth was robust in 2Q26, as confirmed by the Ministry of Trade and Industry (MTI). GDP growth was revised up to 5.9% yoy and 1.4% qoq sa, in line with our expectations."

"The modest upward revision from the advance estimates of 5.7% yoy and 1.1% qoq sa reflected firmer expansion in the manufacturing and services sectors. Growth was driven by the strong performance of manufacturing, wholesale trade, and finance & insurance sectors."

"We are raising our 2026 GDP growth forecast to 5.0%, from 4.3%, on the back of strong 1H26 performance, and the likely persistence of the global artificial intelligence (AI) boom."

"This is despite ongoing geopolitical challenges, and a moderation in the overall GDP cycle due partly to high base effects."

"MTI also further upgraded its official 2026 GDP growth projection to 4.5%-5.5%, from 2.0-4.0%, considering the improved external demand outlook, despite continuing to acknowledge downside risks to the global economy."