SINGAPORE, May 26 (Xinhua) -- Economists have raised Singapore's 2026 economic growth forecasts, citing resilient artificial intelligence (AI)-related investment, strong construction activity and safe-haven capital inflows, even as the Middle East conflict disrupts some energy-dependent industries.
Maybank Investment Bank said in a note on Monday that it has raised Singapore's gross domestic product (GDP) growth forecast for 2026 to 4.2 percent from 3.4 percent, above the government's official projection range of 2 percent to 4 percent.
The research house also upgraded its 2027 GDP growth forecast to 3.1 percent from 2.9 percent.
"The economy is looking resilient and supported by strong tailwinds from AI capex spending, a construction boom and safe-haven flows," it said.
While the Middle East conflict is severely affecting some energy-intensive industries, particularly petrochemicals, Maybank said the impact on other sectors is being cushioned by demand diversion from the Gulf region, benefiting industries such as marine shipping and aviation.
It added that the AI capital expenditure boom is likely to extend into the second half of 2026 as major U.S. hyperscale technology firms continue to increase spending guidance.
The trend is expected to support Singapore's production and exports of memory chips and server-related products, lifting the manufacturing and wholesale trade sectors.
"With Singapore a major beneficiary of Gulf capital outflows, safe-haven flows are keeping borrowing costs low and increasing liquidity in the banking and financial system," it noted.
Construction activity is also expected to remain strong in 2026, backed by a robust pipeline of projects and fiscal support measures aimed at easing rising diesel and bitumen costs linked to the Middle East conflict.
Separately, UOB Global Economics and Markets Research raised its 2026 GDP growth forecast for Singapore to 3.2 percent from 2.5 percent, factoring in stronger-than-expected first-quarter growth and sustained AI-related momentum.
The research house pointed to improving electronics purchasing managers' index (PMI) data in April, driven by gains in new orders and order backlogs.
It also cited South Korea's first 20-day May export data, which showed semiconductor exports surging 202 percent year-on-year, as evidence that AI-driven demand could continue supporting regional growth into the second and possibly third quarters.
According to UOB, the strength in the electronics cycle could fully offset the drag from energy and petrochemical supply disruptions arising from the Middle East conflict.
However, it warned that the outlook remains exposed to significant downside risks, depending on the duration and severity of the supply disruptions.
RHB Investment Bank said upside risks to Singapore's growth outlook could stem from resilient AI-related demand and a faster-than-expected easing of Middle East tensions.
The research expects Singapore's electronics sector -- a key pillar of the export economy -- to maintain growth momentum in the near term, supported by continued global demand for semiconductor components, integrated circuits, disk media products and personal computers amid the AI-driven technology upcycle.
"Singapore's electronics export momentum is expected to remain well-supported by the ongoing global tech upcycle which should continue to provide impetus to manufacturing output," it noted.
Still, RHB maintained its 2026 GDP growth forecast at 3 percent, saying risks remain broadly balanced given persistent geopolitical tensions and uncertainties surrounding U.S. tariff policies.
The Ministry of Trade and Industry said on Monday that it has maintained Singapore's 2026 GDP growth forecast at 2 percent to 4 percent, although downside risks have risen sharply due to the ongoing U.S.-Israel-Iran conflict.
Singapore's economy expanded 6 percent year-on-year in the first quarter of 2026, accelerating from the 5.7 percent growth recorded in the preceding quarter. Enditem
京公网安备 11010802027341号