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UOB lifts Singapore 2026 growth forecast to 4.8% on AI demand

UOB also warned that renewed Middle East tensions and higher oil prices could prompt tighter global monetary policy and potentially delay AI-related capex.

Reported · Written up by our desk · Central Banks

UOB’s Jester Koh has raised its forecast for Singapore’s 2026 GDP growth to 4.8%, up from 4.0%, after the country’s strong first-half 2026 performance.

The bank cited continued momentum in manufacturing and electronics, attributing part of the improvement to AI-related demand, with indicators suggesting supportive tailwinds could last through the third quarter.

UOB linked the outlook to a drawdown of existing inventories, noting the electronics orders-to-inventories ratio has increased, which it expects to support electronics IP growth.

At the same time, UOB flagged downside risks, saying a meaningful re-escalation in Middle East conflict could push up energy and oil prices, leading central banks to tighten further, and if AI-related equities fall as valuations stretch, firms may delay or cancel capital expenditure plans.

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