AI poised to power Singapore’s 3% annual GDP growth

The report attributed Singapore’s strong AI momentum to its early national strategies, public-private collaboration, and targeted infrastructure investments.

Artificial intelligence (AI) could help Singapore maintain 3% annual GDP growth despite long-term demographic challenges, according to a July 2025 report by Morgan Stanley Research.

The report identified AI as a critical tool for sustaining productivity and positioning Singapore as one of the fastest-growing developed economies.

The report attributed Singapore’s strong AI momentum to its early national strategies, public-private collaboration, and targeted infrastructure investments.

With more than 70% of companies covered in the report already adopting AI, top applications include internal productivity tools, customer-facing services, supply chain optimization, and product development.

Singapore’s updated National AI Strategy 2.0 is designed to support these efforts through initiatives in key economic sectors such as manufacturing, financial services, logistics, and healthcare.

It also emphasised foundational AI research, talent development, data governance, and public trust.

Morgan Stanley categorises companies into two groups: “AI Enablers” like Singtel, Keppel, and Sembcorp Industries, which are developing infrastructure such as data centres, energy systems, and connectivity; and “AI Adopters” such as Grab, Sea Group, Singapore Airlines, and ST Engineering, which are implementing AI to improve operations, drive innovation, and scale digital capabilities.

Whilst many companies surveyed were cautious about quantifying the financial impact of AI adoption, some expect modest earnings and capital expenditure growth.

The report also flagged potential risks, including cybersecurity threats, misuse of AI, and the challenge of retraining the workforce. These are areas where the Singapore government has introduced ongoing support measures, including upskilling initiatives like SkillsFuture.

Morgan Stanley analysts viewed Singapore’s AI strategy as a potential model for how small, advanced economies can integrate emerging technologies to address structural challenges and sustain long-term growth.

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