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

Singapore's economy experienced a stronger-than-expected growth of 6 percent year-on-year in the first quarter of 2026. This expansion, reported by the Ministry of Trade and Industry, surpassed the advance estimate of 4.6 percent. The robust performance was primarily driven by strong demand for AI chips, which boosted the wholesale trade, manufacturing, and finance and insurance sectors. Specifically, AI-related demand fueled growth in machinery and electronics. Despite potential negative impacts from rising energy costs and geopolitical tensions in the Middle East, the ministry maintained its 2026 growth outlook of 2 to 4 percent, citing continued AI demand as a supporting factor.

Singapore's economy grew by a seasonally adjusted 1% in the first quarter of the year, exceeding initial government estimates of a contraction and market forecasts. This expansion was driven by a global artificial-intelligence boom, which boosted the nation's manufacturing and services sectors. The growth in these areas helped to offset the negative impact of higher crude oil prices. The Ministry of Trade and Industry (MTI) announced these figures on Monday, indicating a stronger-than-expected performance for the period.