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Singapore’s Ministry of Trade and Industry significantly increased its economic outlook for 2026 on Tuesday, projecting growth between 4.5% and 5.5%. This represents a substantial revision upward from the ministry’s earlier forecast range of 2% to 4%, with the upper bound more than doubling from the initial estimate.
The optimistic forecast reflects stronger-than-anticipated performance in the first half of the year, bolstered by expansion in artificial intelligence-related sectors and robust export activity. Additionally, the government cited reduced economic risks from international conflicts, noting that the U.S.-Iran situation has had a less severe impact than originally anticipated. Global energy prices have remained relatively stable due to oil inventory adjustments and increased reliance on alternative energy sources.
Second-quarter results support the revised projections, with Singapore’s economy expanding at 5.9%, surpassing the preliminary estimate of 5.7%. Growth during this period was primarily driven by manufacturing, wholesale trade, and the finance and insurance sectors. This represents Singapore’s second upward revision this year, following an initial forecast of 1% to 3% growth announced at the beginning of 2026.
The stronger economic outlook may provide monetary policy flexibility for Singapore’s central bank, which unexpectedly tightened policy in late July amid concerns about rising imported costs and inflation pressures from fuel and electronic inputs.
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