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Singapore growth outlook revised higher as AI boosts activity
UOB expects AI-linked capital spending and stronger finance-sector credit demand to help Singapore expand above potential even as tourism faces headwinds.
UOB economist Jester Koh says Singapore’s 2Q26 GDP was revised up to 5.9% year-on-year and 1.4% quarter-on-quarter, attributing the upgrade to AI-related strength in manufacturing and modern services, according to FXStreet.
The Monetary Authority of Singapore’s MTI raised its 2026 GDP forecast to 4.5% to 5.5%, and UOB now projects 5.0% growth. UOB expects AI-linked capex and additional credit demand for the finance sector to support expansion above potential despite tourism headwinds.
FXStreet also notes MTI continues to flag downside risks to global growth, including escalation and broadening of the Middle East conflict, additional US tariff actions, and a sharp correction in financial markets. MTI added that Singapore’s external demand outlook has improved versus its assessment in May.
UOB expects US growth to remain resilient on AI-related investment, while softer consumption tied to sustained inflationary pressures could weigh on Singapore’s second-half growth.