Gov’t revises GDP forecast up to 4% on strong trade, AI exports

Outward-oriented services sectors are also projected to grow steadily.

Singapore’s economy is now expected to grow to around 4% this year, up from the earlier forecast of 1.5-2.5%, as stronger global demand and robust exports of AI-related semiconductors support trade-related sectors.

Outward-oriented services sectors, including information & communications, professional services, and finance & insurance, are also projected to continue growing steadily, according to a Ministry of Trade and Industry report.

In the third quarter (Q3), the economy grew 4.2% year-on-year (YoY), following 4.7% growth in Q2. Meanwhile, GDP growth averaged 4.3% YoY for the first three quarters of 2025.

The manufacturing, wholesale trade and finance & insurance sectors mainly drove the quarter’s growth.

However, GDP is expected to grow 1.0–3.0% in 2026 due to slower expansion amongst key trading partners and expected moderation in manufacturing and trade-related services.

Semiconductor equipment makers may face near-term challenges due to uncertainty over US tariffs. The electronics cluster will benefit from AI-related semiconductors, whilst transport engineering growth is supported by aerospace and marine sectors.

Meanwhile, construction activity is forecast to continue rising, whilst retail and food & beverage sectors are expected to grow slowly.

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