UOB’s Jester Koh notes that Singapore’s 1Q26 GDP was sharply revised larger and that MTI stored its 2026 development forecast at 2.0–4.0%. The financial institution raises its 2026 GDP forecast to three.2%, citing sustained AI-related demand and robust electronics indicators. Nonetheless, it highlights vital draw back dangers from Center East-related provide disruptions and a weaker international backdrop.
AI demand lifts Singapore development outlook
“Outlook – We increase our 2026 GDP development forecast to three.2% (from 2.5% prev; 2027F: 2.1%), incorporating the 1Q outperformance alongside sustained AI-related tailwinds, as evidenced by the advance within the Apr electronics PMI (51.7; Mar: 51.4), pushed by will increase within the new orders (Apr: 52.3; Mar: 52.0) and order backlog (Apr: 51.7; Mar: 51.4) subindices.”
“In the meantime, South Korea’s first 20-day exports knowledge for Might confirmed a 202% y/y bounce in semiconductor exports, confirming that AI-related tailwinds may proceed to assist development in 2Q26 and presumably 3Q26, doubtless totally offsetting the related drag from power and petrochemical enter provide disruptions stemming from the Center East battle.”
“Our forecast is topic to vital left-tail dangers, contingent on the length and extent of the availability disruptions.”
“Beneath our baseline forecast, development is more likely to run reasonably above potential in 2026, with an estimated constructive output hole of 0.6%.”
“Within the Financial Survey of Singapore 1Q26 Field Article 2.1, it was highlighted that larger electrical energy costs, in addition to materials disruptions to important semiconductor inputs (helium, bromine, and sulfur), may end in a slowdown in semiconductor manufacturing.”
(This text was created with the assistance of an Synthetic Intelligence instrument and reviewed by an editor.)
