Singapore economy to stay firm for rest of 2026 as AI boom cushions oil shocks, new US tariff: MAS
Singapore's tech sector continued to grow faster than usual and is expected to drive most of the country's economic growth this year.
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This audio is generated by an AI tool. Natasha Ganesan Natasha Ganesan 27 Jul 2026 03:00PM (Updated: 27 Jul 2026 03:06PM) Bookmark Bookmark Share WhatsApp Telegram Facebook Twitter Email LinkedIn Set CNA as your preferred source on Google Add CNA as a trusted source to help Google better understand and surface our content in search results. Read a summary of this article on FAST.
Get bite-sized news via a newcards interface. Give it a try. Click here to return to FAST Tap here to return to FAST FAST SINGAPORE: The Singapore economy is expected to remain on a firm growth trajectory for the rest of 2026, with the global artificial intelligence boom helping to cushion the impact of higher energy costs arising from the Middle East conflict and a new wave of US import tariffs effective from Jul 24.
The Monetary Authority of Singapore (MAS) said in its latest quarterly macroeconomic review on Monday (Jul 27) that Singapore's technology-related sectors continued to expand faster than expected as a result of resilient global AI demand.The electronics segment grew on the back of strong AI-driven demand for memory chips and server infrastructure, while growth was also observed in the infocomm and consumer electronics sectors as firms ramped up production to meet increased demand for AI servers and related products. The technology-related segments are projected to account for the bulk of the economy’s expansion for the full year, up from around 50 per cent in 2025, with momentum from the AI-driven tech cycle more than offsetting headwinds from the Middle East crisis, said the central bank.
However, it also cautioned that the current valuations of AI could be overly optimistic if earnings fail to meet investors' expectations. That said, given the continued strength of AI-related earnings and long-term investments of major large cloud service providers, or hyperscalers, the strong growth in the AI sector could persist for some time before fundamentals are tested, MAS said in the report.Singapore's economy grew 5.
7 per cent year-on-year from the April to June period, which was slightly slower than the 6.3 per cent growth in the preceding quarter, according to advance estimates the central bank released on Jul 14.Overall, MAS said on Monday that the positive output gap is now forecast to widen to 0.
7 per cent of potential gross domestic product (GDP) in 2026. This indicates that economic activity is expected to rise above the economy's potential.Nevertheless, renewed fighting in the Middle East has increased concerns over energy supplies.
MAS noted in its report that energy prices are expected to remain higher tha