Economists Raise Singapore Growth Forecast Amid AI Boom

By Amanda Lee

SINGAPORE--Experts surveyed by Singapore's central bank have raised their growth forecasts for the city-state, citing the artificial-intelligence boom as a key driver.

Economists and analysts now expect gross domestic product growth of 3.6% this year, the Monetary Authority of Singapore's March survey showed.

The median estimate is higher from the December survey, which predicted a 2.3% expansion but below the 5.0% growth recorded in 2025.

The manufacturing sector, which contributes around 20% of Singapore's GDP, is also expected to perform better than last year, with the survey anticipating 4.3% growth, compared to the 3.6% expected in the December survey.

However, the MAS survey respondents expect slower growth of 2.5% in 2027.

Tariffs remain a major factor for the Southeast Asian's economic outlook, with recent developments adding fresh uncertainty on what rates its U.S.-bound goods would face.

The U.S. Supreme Court ruling last week struck down the bulk of tariffs President Trump had set on trading partners, but his administration is already working on other ways to enact trade policy. Trump has announced a new temporary 10% global tariff, which U.S. Trade Representative Jamieson Greer has said it could increase to 15% for some nations.

Analysts widely expect the administration to seek to replace the struck down-tariffs with levies based on other legal provisions, and it is unclear what the economic impact on Asian economies will be.

In the MAS survey, which was carried out before the latest tariff developments, respondents cited geopolitical risks, such as rising trade tensions and wars, as a threat to Singapore's economic outlook.

The forecasters identified the AI-led tech cycle upturn as an offsetting tailwind that can help economic growth.

Singapore's role in the chip and electronics supply chains has made it a beneficiary of the AI upswing. The MAS survey, however, warned of related risks, citing the danger of an AI bubble spilling over to financial markets and the global economy.

Still, the survey respondents carried a positive view on Singapore's exports, expecting annual shipments of non-oil goods to rise 4.5%, compared with the 2.0% forecast in December. That's slightly higher than government agency Enterprise Singapore's forecast of growth of 2.0% to 4.0%.

On monetary policy, about half of the respondents expect the central bank to tighten policy settings in April. Inflation projections were higher, with the core print for 2026 now estimated at 1.5% versus the 1.3% projected previously. Headline inflation is still predicted at 1.5%.

The MAS survey reflects the views of 22 respondents. It doesn't represent the central bank's views or forecasts.

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

February 25, 2026 23:14 ET (04:14 GMT)