Singapore upgrades 2026 key exports growth forecast as AI-related demand surges

Singapore’s Enterprise Singapore raised its 2026 non-oil domestic exports (NODX) growth forecast to 3% to 5%, up from 2% to 4%, due to strong AI-driven demand in electronics. The revision follows a 9.6% NODX increase in the first quarter of 2026, with electronics shipments jumping 57.8%—more than double the 23.4% growth recorded in Q4 2025. Non-electronic NODX declined 3.5% in Q1, reversing a 9.4% gain from the prior quarter, while exports to Singapore’s top 10 markets rose, led by Taiwan, Hong Kong, and South Korea. The upgrade reflects stronger-than-expected global economic resilience, supported by AI-related trade growth, according to EnterpriseSG’s May 25 quarterly review. The World Trade Organisation (WTO) raised its 2026 merchandise trade volume growth forecast to 1.9%, up from 0.5%, while the International Monetary Fund (IMF) increased its projection to 2.8% from 2.6%. EnterpriseSG noted that AI demand and reduced tariff impacts contributed to the upward revisions, though risks remain from prolonged Middle East conflict and escalating trade tensions. Domestic manufacturing sentiment improved, with 43% of electronics firms and 49% of precision engineering companies expecting stronger overseas deliveries in Q2 2026. The Ministry of Trade and Industry (MTI) separately maintained Singapore’s 2026 GDP growth forecast at 2% to 4%, despite acknowledging heightened downside risks from the Iran war. The economy expanded 6% year-on-year in Q1 2026, extending a 5.7% growth rate from the prior quarter, though the conflict’s impact on global trade remains a concern. EnterpriseSG attributed the revised export outlook to sustained AI-driven demand, which has bolstered electronics exports and offset weaker performance in non-electronic sectors. The agency cautioned that high base effects in the latter half of 2026 could temper growth, while geopolitical instability and trade policy shifts pose ongoing threats. Despite these risks, the forecast aligns with global trade projections from the WTO and IMF, reflecting cautious optimism amid evolving economic conditions.