Singapore's Ministry of Trade and Industry raised its 2026 economic forecast to between 4.5 and 5.5 per cent on Tuesday, citing stronger-than-expected performance in the first half of the year and accelerating global AI-related capital expenditure. The upgrade prompted several economists to revise their own projections upward, with Maybank lifting its forecast to 5.2 per cent and OCBC to 5.2 per cent.

"The upgraded forecast is certainly a bullish signal, largely attributable to the global AI investment boom," said OCBC chief economist Selena Ling. However, MTI's permanent secretary Beh Swan Gin cautioned that Singapore is not solely dependent on AI, with other sectors including construction, finance, insurance and information and communications also contributing to growth.

Economists echoed that diversification, noting that weakness remains in parts of the economy hit by Middle East supply disruptions, particularly chemicals manufacturing, and that dampened consumer sentiment amid inflation could weigh on retail and food and beverage sectors, Channel NewsAsia business reports.