AI and Construction Spending Drive Upgrade in Singapore's Growth Forecast

Singapore (ANTARA) - A number of leading research institutions have raised Singapore’s growth projections, citing the resilience of economic activity, sustained investment in artificial intelligence (AI), and a rapid increase in the construction sector, while easing tensions in the Middle East have also reduced downside risks for the export-dependent economy.

DBS Group Research has raised its projection for Singapore’s real gross domestic product (GDP) growth to 4.3 per cent in 202 none 6 and 3 per cent in 2027, up from 2.8 per cent and 2.3 per cent, respectively.

“The de-escalation of US-Iran tensions reduces stagflationary pressure and growth downside risks. The ongoing global AI cycle, momentum in financial services, and the rapid expansion in the construction sector also support this positive outlook,” stated DBS, as reported by Xinhua.

The research institution noted that Singapore’s economy remains resilient despite facing geopolitical shocks due to the conflict in the Middle East and is expected to close the first half of 2026 with solid performance, providing positive momentum for the remaining months of 2026.

Maybank Investment Bank also stated that it expects Singapore’s GDP to grow by 4.6 per cent in 2026, which is above the official government forecast range of 2 to 4 per cent.

The bank noted that the impact of the Gulf conflict on growth and inflation remains limited, adding that a strong first-quarter GDP growth of 6 per cent has also supported the upward revision in projections.

According to Maybank, robust global AI capital expenditure and the rapid expansion in the construction sector have helped mitigate pressures from high energy prices and supply disruptions related to the Middle East conflict.

Separately, UOB Global Economics and Markets Research has raised its 2026 Singapore GDP growth projection to 4 per cent from a previous 3.2 per cent, stating that the positive trend regarding AI is likely to persist at least until the third quarter.

UOB projects second-quarter GDP growth of 0.6 per cent quarter-on-quarter and 5 per cent year-on-year.

The research institution added that the easing of tensions in the Middle East and the gradual normalisation of energy flows through the Strait of Hormuz have reduced downside risks to Singapore’s economic growth prospects.