SINGAPORE – Singapore upgraded its key exports growth forecast for 2026, as strong artificial intelligence-related demand is expected to support electronics shipments despite higher downside risks from the Middle East conflict.
Enterprise Singapore now expects non-oil domestic exports (NODX) to rise by 3 per cent to 5 per cent in 2026, compared with its earlier forecast of 2 per cent to 4 per cent.
The stronger forecast is underpinned by the better-than-expected export performance in the first three months of the year, especially in electronics, EnterpriseSG in its quarterly review on May 25.
NODX rose 9.6 per cent in the first quarter of 2026, after climbing 12.7 per cent in the fourth quarter of 2025.
Electronic shipments surged 57.8 per cent, accelerating from the 23.4 per cent growth recorded in the previous quarter.
However, non-electronic NODX declined by 3.5 per cent in the first quarter, reversing the 9.4 per cent growth in the fourth quarter of 2025.
Nodx to the top 10 markets grew as a whole in the first quarter, driven by Taiwan, Hong Kong and South Korea.
“Since the last update, the global economy has remained more resilient than expected, supported by robust AI-related demand,” said EnterpriseSG.
It noted that the World Trade Organisation (WTO) upgraded its global merchandise trade volume growth forecast to 1.9 per cent in 2026, up from 0.5 per cent previously, reflecting continued strength in AI-related trade and a smaller-than-expected drag from tariffs.
The International Monetary Fund (IMF) also raised its global trade volume growth forecast to 2.8 per cent, up from 2.6 per cent previously.
“The updated forecast remains consistent with the IMF and WTO’s projection of softer growth in global trade volumes in 2026, while also factoring in high base effects in the latter half of the year. Downside risks include a prolonged conflict in the Middle East and a potential re-escalation of trade tensions,” said EnterpriseSG.
Domestically, a strong double-digit net weighted percentage of firms – particularly in the electronics and precision engineering clusters – expect improved overseas deliveries in the second quarter of 2026, at 43 per cent and 49 per cent respectively, the government agency noted.
Overall, business sentiment in the manufacturing sector for the next six months improved from the previous quarter, the agency said.
The upgrade comes as the Ministry of Trade and Industry (MTI) announced on May 25 that Singapore’s GDP growth forecast for 2026 has been maintained at 2 per cent to 4 per cent, although downside risks have risen significantly as a result of the Iran war.
In the first quarter of 2026, the Singapore economy grew 6 per cent year on year, extending the 5.7 per cent expansion in the previous quarter.
