Singapore’s economy grows more than 5 percent amid AI boom

City-state’s GDP expands 5.4 percent successful July-September quarter, according to beforehand authorities estimates.

Singapore’s system grew much than 5 percent successful the astir caller quarter, continuing an AI-fuelled roar that has made the city-state 1 of the fastest-growing precocious economies.

Gross home merchandise (GDP) grew 5.4 percent year-on-year betwixt July and September, down from a 6.2 percent enlargement successful the 2nd quarter, according to beforehand authorities estimates released connected Wednesday.

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Manufacturing, which is dominated by the city-state’s semiconductor industry, grew 7.5 percent, according to the estimates from the Ministry of Trade and Industry.

Increased output successful “electronics, precision engineering, transport engineering and wide manufacturing clusters” drove growth, the ministry said, offsetting declines successful the chemicals and biomedical sectors.

Construction, including AI-related investments specified arsenic information centres, expanded 8.8 per cent, according to the figures.

Despite the heady expansion, Singapore’s cardinal slope near its monetary argumentation settings untouched successful its latest announcement connected Wednesday, citing expectations that AI request volition chill successful 2027.

The Monetary Authority of Singapore, which manages monetary argumentation done currency speech rates alternatively than involvement rates, said it expected halfway ostentation to mean 1.5–2.0 percent successful 2026.

“Global AI-driven maturation is expected to easiness successful the second fractional of adjacent twelvemonth from its existent exceptional pace, portion higher involvement rates, amid elevated ostentation successful the precocious economies, would measurement connected last request growth,” the cardinal slope said successful a statement.

Singapore is simply a large planetary subordinate successful the booming spot sector, a presumption that has helped it upwind choppy economical conditions, including the vigor daze prompted by the US-Israel warfare connected Iran.

The Southeast Asian city-state accounts for astir 10 percent of planetary semiconductor output and 20 percent of semiconductor instrumentality production, according to authorities figures.

Yeow Hwee Chua, an adjunct prof of economics astatine Nanyang Technological University, described Singapore’s economical show arsenic “impressive for a high-income economy, particularly fixed the uncertain planetary environment”.

“The planetary exertion concern roar has been an important driver,” Chua told Al Jazeera.

“Strong request for electronics has supported manufacturing and related wholesale trade, illustrating however Singapore benefits from its presumption successful planetary proviso chains,” helium said.

Singapore’s system is expected to turn 5 percent successful 2026, according to the IMF’s latest economical forecast, faster than immoderate different precocious system but Taiwan.

The city-state’s GDP grew 5 percent successful 2025, its 2nd consecutive twelvemonth of maturation supra 5 percent – the archetypal specified streak since 2010 and 2011.