Singapore’s full-year GDP forecast has been upgraded to 4.5% to 5.5%, up from the previous 2% to 4% growth estimate, the Ministry of Trade and Industry (MTI) said.

Further acceleration in AI-related capital expenditure raises growth prospects. MTI noted the better-than-expected performance of the Singapore economy in the first half of the year, and the acceleration in global AI-related capital expenditure, as reasons for the improved outlook. Overall, H1 GDP growth is 6.1%. Strong performance in manufacturing, wholesale trade, and finance & insurance sectors drove the GDP growth in Q2, the MTI said. Sudden risk-off sentiments in the financial markets regarding global AI-related capital spending could trigger sharp corrections in these markets.