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3w ago

Singapore Posts Strong Q1 Growth Driven by AI-Linked Exports

The better-than-expected quarter gives policymakers breathing room as higher energy prices and supply disruptions from the Iran war raise inflation and downside risks.

A view of the central business district skyline in Singapore May 27, 2025. REUTERS/Edgar Su/File Photo
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Singapore is a big producer of the memory chips used in AI data centres
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Overview

  • The economy expanded 6.0% year-on-year and 1.0% quarter-on-quarter on a seasonally adjusted basis, figures the trade ministry published on Monday showed.
  • Growth was led by wholesale trade, manufacturing and finance, with robust AI-related demand lifting machinery, electronics and precision-engineering output.
  • The Ministry of Trade and Industry kept its 2026 GDP forecast at 2–4% while warning that the Iran war has materially raised downside risks to growth.
  • Enterprise Singapore raised its non-oil domestic exports outlook to 3–5% for 2026 after NODX rose 9.6% in Q1 and electronic shipments surged, reflecting strong data‑centre and chip demand.
  • The Monetary Authority of Singapore tightened policy in April and raised 2026 inflation projections to 1.5–2.5% as higher oil and input costs from disruptions through the Strait of Hormuz squeeze households, hit fuels and chemicals trade, and limit policy options.