{"id":284722,"date":"2026-02-10T23:43:08","date_gmt":"2026-02-10T23:43:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/284722\/"},"modified":"2026-02-10T23:43:08","modified_gmt":"2026-02-10T23:43:08","slug":"cna-explains-whats-driving-singapores-exceptional-economic-growth-and-can-it-last","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/284722\/","title":{"rendered":"CNA Explains: What’s driving Singapore’s exceptional economic growth, and can it last?"},"content":{"rendered":"

Singapore also benefited from “competitively lower” tariffs on exports to the United States compared to other Southeast Asian economies, Ms Ling noted.<\/p>\n

Standard Chartered economists said relatively benign global monetary and fiscal conditions, robust AI-related demand, tariff truces and lower effective tariff rates likely combined to boost economic activity.<\/p>\n

How unusual is this performance?<\/p>\n

Economists agreed that Singapore’s GDP performance over the past two years has been exceptional for a developed economy.<\/p>\n

In recent history, Singapore has only recorded such high growth rates when recovering from major crises, said Ms Lee Yen Nee, senior country risk analyst at BMI Research.<\/p>\n

“Last year, this growth rate was achieved without a preceding crisis, and it was almost entirely driven by the global capital spending on AI,” she said, adding that while electronics manufacturing benefitted most, spillover effects reached services sectors involved in goods movement.<\/p>\n

Ms Sheana Yue, senior economist at Oxford Economics, called it “particularly exceptional” that Singapore’s economy expanded by 5 per cent despite “heightened external challenges amid US tariff hikes”.<\/p>\n

In April last year, MTI downgraded its GDP forecast <\/a>to between 0 and 2 per cent on fears that US tariffs would severely impact Singapore.<\/p>\n

Ms Lee said Singapore appeared largely shielded because semiconductors, pharmaceuticals and many high-tech products remained exempt from tariffs.<\/p>\n

“Singapore\u2019s high exposure to these areas means that the economy is largely shielded. Furthermore, Singapore benefitted from the flurry of front-loading activity to beat the implementation of higher US tariffs,” she added.<\/p>\n

Did other Asian economies see similar growth?<\/p>\n

Several Asian economies also recorded strong growth in 2025, economists noted.<\/p>\n

Taiwan’s economy grew 8.63 per cent \u2013 its fastest pace in 15 years \u2013 while Malaysia’s advance estimates indicated 4.9 per cent growth.<\/p>\n

“The main driver was exports and investment related to electronics, AI in particular,” said Ms Yue, describing Taiwan and Malaysia’s performance as “stunning”.<\/p>\n

The surge in demand for AI products, coupled with tariff-related front-loading, benefited the wider Asian region where high-end chips are produced, she said.<\/p>\n

Why did forecasts underestimate growth?<\/p>\n

Singapore initially underestimated AI-related electronics demand, acknowledged Ms Yong Yik Wei, chief economist at MTI, during a media briefing on Tuesday.<\/p>\n

“We underprojected because it’s quite a nascent technology, and it’s quite hard to get the exact trajectory with a high level of precision. So on hindsight, we did underproject that strength in the AI demand,” she said in response to CNA’s question about the ministry’s two forecast upgrades last year.<\/p>\n

That demand created positive spillover effects into related sectors such as wholesale trade, she added.<\/p>\n","protected":false},"excerpt":{"rendered":"Singapore also benefited from “competitively lower” tariffs on exports to the United States compared to other Southeast Asian…\n","protected":false},"author":2,"featured_media":284723,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[343,114,127756,184,85,46,90924],"class_list":{"0":"post-284722","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-artificial-intelligence","9":"tag-business","10":"tag-cna-explains","11":"tag-economy","12":"tag-il","13":"tag-israel","14":"tag-singapore-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/284722","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=284722"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/284722\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/284723"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=284722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=284722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=284722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}