Singapore's Ministry of Trade and Industry (MTI) has maintained its 2026 economic growth forecast at 2 to 4 percent, bolstered by a strong first-quarter performance. The economy grew 6 percent year-on-year in Q1, driven by robust AI-related demand boosting wholesale trade and manufacturing, alongside a strong finance and insurance sector.
Despite this positive start, the MTI has cautioned about "significant" downside risks stemming from the Middle East conflict. Disruptions to energy and input supplies, potential trade policy escalations, and a sharp pullback in AI spending are key concerns. While resilience is noted, the outlook for export-oriented industries has weakened, and consumer sentiment could impact domestic sectors, though government support measures aim to mitigate this.
