DBS Group Research economist Chua Han Teng assesses Singapore’s economic outlook as resilient but increasingly tested by Middle East tensions and energy risks. The bank highlights strong 1Q26 GDP data, robust AI-driven exports, and solid services and construction activity. However, DBS warns that external uncertainties and energy disruptions could weigh on growth, while keeping its 2026 GDP forecast at 2.8%.

AI exports offset energy disruptions risk

"Singapore is confronting the ongoing Middle East conflict from a position of strength, but the renewed geopolitical shock is testing the resilience of its highly open economy."

"Real GDP growth outperformed again, with an upward revision today to 6.0% yoy and 1.0% qoq sa in 1Q26, above advance estimates of 4.6% yoy and -0.3% qoq sa."

"The positive adjustment was driven by stronger-than-expected outcomes across the manufacturing, construction, and services sectors."

"We still see positive dynamics in key outward-oriented sectors, but expect growth to be uneven and challenged by external uncertainties as the year progresses."

"We maintain our 2026 economic growth forecast at 2.8%, and continue to monitor two-sided risks."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)