{"id":466069,"date":"2026-05-25T11:09:11","date_gmt":"2026-05-25T11:09:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/466069\/"},"modified":"2026-05-25T11:09:11","modified_gmt":"2026-05-25T11:09:11","slug":"singapores-economy-beats-expectations-as-govt-warns-of-iran-war-fallout-international-trade","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/466069\/","title":{"rendered":"Singapore\u2019s economy beats expectations as gov\u2019t warns of Iran war fallout | International Trade"},"content":{"rendered":"

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Published On 25 May 202625 May 2026<\/p>\n

Singapore\u2019s economy has grown faster than expected in the first three months of the year as furious demand for AI chips has outweighed the fallout of the US-Israel war on Iran.<\/p>\n

Singapore\u2019s gross domestic product (GDP) expanded 6 percent year-on-year in the first quarter, the Ministry of Trade and Industry said on Monday, comfortably beating an official advance estimate of 4.6 percent.<\/p>\n

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On a seasonally adjusted basis, GDP grew 1 percent from the previous quarter.<\/p>\n

The Trade Ministry said GDP growth was driven by strong performances of the city-state\u2019s wholesale trade, manufacturing, and finance and insurance sectors.<\/p>\n

\u201cIn particular, robust AI-related demand led to growth in the machinery, equipment & supplies segment of the wholesale trade sector, as well as the electronics and precision engineering clusters within the manufacturing sector,\u201d the ministry said in a statement.<\/p>\n

The ministry kept its 2026 growth outlook steady at between 2 and 4 percent despite \u201cdownside risks\u201d from rising energy and fertiliser prices amid the closure of the Strait of Hormuz to most shipping.<\/p>\n

\u201cThese factors will weigh on global economic activity for the rest of the year,\u201d it said.<\/p>\n

\u201cOn the other hand, AI-related demand has\u00a0remained\u00a0robust and should continue to support the growth of regional economies throughout the year.\u201d<\/p>\n

Khoon Goh, head of Asia research for ANZ, said the GDP figures likely do not fully reflect the impact of the crisis in the Middle East.<\/p>\n

\u201cIt will probably be more apparent in Q2, but the solid Q1 GDP sets up a strong base for the rest of 2026,\u201d Goh told Al Jazeera.<\/p>\n

\u201cThe AI-related investment boom is powering the manufacturing sector, and unless the Singapore economy runs out of oil, strong activity in manufacturing will continue to drive growth,\u201d he said.<\/p>\n

Nearly three months since the start of the war, the collapse of shipping via the Strait of Hormuz amid competing Iranian and US blockades continues to cast a shadow over the global economy.<\/p>\n

The United Nations last week cut its 2026 growth forecast for the global economy to 2.5 percent, down from 2.7 percent, citing the fallout of the conflict.<\/p>\n

Anthony Tay, an associate professor of economics at Singapore Management University, said Singapore\u2019s latest GDP figures will be met \u201cmore with relief than glee\u201d after local economists raised expectations for growth amid the AI boom.<\/p>\n

\u201cFor the whole of 2026, the expectation among local economic forecasters is for around 3.6 percent growth, which is a brighter outlook compared with previous quarters \u2026 while acknowledging significant downside risks,\u201d Tay told Al Jazeera.<\/p>\n

Singapore, one of the world\u2019s most trade-reliant economies, has played\u00a0a major role\u00a0in the global rollout of AI as a producer of semiconductors and semiconductor equipment.<\/p>\n

The Southeast Asian country accounts for about 10 percent of semiconductor production and 20 percent of semiconductor chip equipment production globally.<\/p>\n

Yeow Hwee Chua, an economics professor at Nanyang Technological University, said a key question is whether the strong growth can translate into a more broad-based expansion and \u201cstronger household confidence.\u201d<\/p>\n

\u201cThe 6 percent year-on-year figure is strong, especially for a mature economy like Singapore,\u201d Chua told Al Jazeera.<\/p>\n

\u201cIt is certainly encouraging, although I would interpret it with some caution given Singapore\u2019s high exposure to global demand and external conditions,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Published On 25 May 202625 May 2026 Singapore\u2019s economy has grown faster than expected in the first three…\n","protected":false},"author":2,"featured_media":466070,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[1668,72,1954,113,61,1955,60,9458],"class_list":["post-466069","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-asia-pacific","tag-business","tag-business-and-economy","tag-economy","tag-ie","tag-international-trade","tag-ireland","tag-singapore"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/466069","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=466069"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/466069\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/466070"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=466069"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=466069"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=466069"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}