AI capex wave pushes Singapore to double its 2026 growth outlook

Singapore raised its 2026 growth forecast to 4.5%-5.5%. The economy grew 5.9% year-on-year in the second quarter, driven by AI-led demand for its electronics.

The revision came out on Aug. 11 from the Ministry of Trade and Industry. The increase is because the first half has exceeded its own projections with a stronger view of the months ahead.

MTI said the outlook was due to an acceleration in global capital spending on AI. And the fact that the forecast floor has been raised from 2.0% to 4.5% means the government now views the AI spending wave as a durable trend.

MTI hauls the 2026 forecast up more than two points

Singapore’s April to June growth of 5.9% was slower than the 6.3% pace posted in the first quarter, according to MTI figures. Output increased 1.4% quarter-on-quarter, seasonally adjusted.

This is up from 1.2% at the beginning of the year. The first half of 2026 saw 6.1% year-on-year growth.

Electronics remained strong. Global “fervor” for artificial intelligence continued to draw orders into Singapore’s exports of chips and components.

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