May 25, 2026 | 09:00 pm
The Merlion, the official mascot of Singapore, at Marina Bay, Singapore, February 6, 2020. Shutterstock
TEMPO.CO, Jakarta - Singapore on Monday, May 25, maintained its economic growth projection for 2026 at 2 to 4 percent, citing stronger-than-expected first quarter (Q1) expansion driven by demand related to artificial intelligence (AI), although risks from the conflict between the U.S., Israel, and Iran overshadow the global outlook, ANTARA reported.Singapore's Ministry of Trade and Industry said the country's economy grew 6 percent year-on-year (yoy) in Q1, continuing the 5.7 percent expansion recorded in the previous quarter, supported by strong performance in the wholesale trade, manufacturing, and finance and insurance sectors.Strong AI-related demand continues to underpin growth, the ministry said in a statement.Meanwhile, rising prices and shortages of crude oil and related products caused by the conflict in the Middle East affected several economic sectors. This resulted in contractions in the fuel and chemical segments of the wholesale trade sector, as well as in the chemical cluster of the manufacturing sector.In February, the ministry raised its growth projection for 2026 from 1 percent to 3 percent, to 2 percent to 4 percent, expecting the strong momentum from the fourth quarter (Q4) of 2025, largely driven by a surge in AI investment, to continue into 2026, along with expansionary fiscal policies in major economies.However, since then, the global economic outlook has weakened following the outbreak of the conflict, the ministry said."AI-related demand has remained robust and should continue to support the growth of regional economies throughout the year," the ministry added.Read: Luhut Optimistic on 8% Growth Despite Heavy MBG CostsClick here to get the latest news updates from Tempo on Google News
