Singapore’s economy beats expectations as gov’t warns of Iran war fallout

GDP grows 6 percent year-on-year in first quarter as AI boom outweighs rising energy costs.Singapore’s economy has grown faster than expected in the first three months of the year as furious demand for AI chips has outweighed the fallout of the US-Israel war on Iran.Singapore’s gross domestic product (GDP) expanded 6 percent year-on-year in the first quarter, the Ministry of Trade and Industry said on Monday, comfortably beating an official advance estimate of 4.6 percent.Recommended Stories list of 4 itemslist 1 of 4Death toll rises to four in Philippines building collapse; 17 missinglist 2 of 4Russia invites media to view deadly strike on college in Luhansklist 3 of 4Mexico City paints record-breaking football mural ahead of World Cuplist 4 of 4Africa Day 2026: Has the continent achieved true liberation?end of listOn a seasonally adjusted basis, GDP grew 1 percent from the previous quarter.The Trade Ministry said GDP growth was driven by strong performances of the city-state’s wholesale trade, manufacturing, and finance and insurance sectors.“In particular, robust AI-related demand led to growth in the machinery, equipment & supplies segment of the wholesale trade sector, as well as the electronics and precision engineering clusters within the manufacturing sector,” the ministry said in a statement.The ministry kept its 2026 growth outlook steady at between 2 and 4 percent despite “downside risks” from rising energy and fertiliser prices amid the closure of the Strait of Hormuz to most shipping.“These factors will weigh on global economic activity for the rest of the year,” it said.“On the other hand, AI-related demand has remained robust and should continue to support the growth of regional economies throughout the year.”Khoon Goh, head of Asia research for ANZ, said the GDP figures likely do not fully reflect the impact of the crisis in the Middle East.“It will probably be more apparent in Q2, but the solid Q1 GDP sets up a strong base for the rest of 2026,” Goh told Al Jazeera.