The Ministry of Trade and Industry (MTI) announced Monday that Singapore is keeping its 2026 GDP growth forecast at 2 to 4 percent, citing a better-than-expected first quarter performance.
The economy grew 6 percent year-on-year from January to March, building on the 5.7 percent expansion in the previous quarter. However, quarter-on-quarter growth slowed to 1 percent from 1.3 percent.
Growth was driven by the wholesale trade, manufacturing, and finance sectors. Robust AI-related demand boosted machinery, electronics, and precision engineering. The finance and insurance sector also saw broad-based gains in banking, fund management, and securities.
But downside risks have risen sharply, MTI warned. The Iran conflict has led to higher crude oil prices and shortages, hurting the fuels, chemicals, and derivatives segments. Disruptions to the Strait of Hormuz have also driven up global energy and input costs, increasing inflationary pressure.
MTI said it will continue to monitor developments and adjust the forecast if necessary.