Singapore raises forecast for key exports amid AI boom

SINGAPORE - Singapore has raised its forecast for key exports in 2026 in response to an improved global economic outlook, especially for artificial intelligence-related demand.

Non-oil domestic exports, or NODX, are expected to grow 2 per cent to 4 per cent in 2026, an upgrade over the previous forecast of 0 per cent to 2 per cent in November.

Enterprise Singapore said that robust AI-related demand and high gold prices should continue to provide support for NODX growth.

However, downside risks include an escalation in trade tensions or a correction in AI-related investment demand.

Maybank economists Chua Hak Bin and Brian Lee said: “It isn’t surprising to see EnterpriseSG raising their NODX forecast.

“We expect a sustained AI boom to translate to strong demand for Singapore’s electronics exports, particularly in semiconductors, servers and server-related products.”

They added that strong regional trade activities will be another factor bolstering exports in 2026, on the back of supply chain shifts to ASEAN.

The higher 2026 forecast comes after key exports rose by a better-than-expected 4.8 per cent in 2025, up from 0.2 per cent growth in 2024.

Electronics NODX expanded 12.7 per cent year on year, driven by strong AI-related demand, particularly in the fourth quarter of 2025.

“This momentum is expected to carry into 2026 as export orders for the electronics segment remained strong, with firms expecting higher orders in the first quarter of 2026,” EnterpriseSG said.

Meanwhile, non-electronics NODX also grew, by 9.4 per cent year on year in the fourth quarter of 2025, lifting the full-year growth to 2.5 per cent.

In particular, the year-end surge in non-monetary gold and pharmaceuticals contributed notably to full-year 2025 growth, EnterpriseSG said.

This was driven respectively by high gold prices amid demand for safe-haven assets and a boost in pharmaceuticals output in the fourth quarter.

It added that since its last update in November, the 2026 external economic outlook has improved, notwithstanding continued uncertainty.

The International Monetary Fund (IMF) upgraded its global economic growth forecast to 3.3 per cent in 2026, up from the previous estimate of 3.1 per cent.

The growth outlook was also upgraded for most of Singapore’s key trading partners, including China, the United States, the euro area and ASEAN, EnterpriseSG noted.

The World Trade Organization also highlighted that the rapid acceleration of AI may lead to higher overall growth in global merchandise trade in 2026 than its projection of 0.5 per cent.

EnterpriseSG added that its 2026 upgraded forecast for Singapore remains consistent with IMF’s projection of softer growth in global trade volumes in 2026.

“Singapore’s merchandise and services trade extended its growth in 2025. For 2026, the global economic situation remains fluid,” it said.

“NODX growth is expected to be supported in part by electronics amid strong AI-related demand, though the overall growth pace could moderate from that in 2025.”

In the electronics segment, integrated circuits or chips expanded by 16.3 per cent in 2025. Personal-computer exports grew by 65.1 per cent, while disk and media products saw growth of 13.3 per cent.

In the non-electronics segment, non-monetary gold exports grew by 56 per cent. Pharmaceuticals grew by 10.6 per cent.

Structures of ships and boats expanded by 188.9 per cent.

DBS senior economist Chua Han Teng said: “NODX growth in 2025 was driven more by electronics products than non-electronics shipments, with incoming forward-looking data at the start of 2026 suggesting a continuation of this trend in the coming months.”

He added that Singapore’s electronics NODX will likely be supported by sustained global AI-related tailwinds and demand for server products and memory chips.

“We remain cautious on the outlook for non-electronics NODX, as they will likely face downside pressures from the lingering and delayed impact of higher US tariffs globally,” he said.

Key exports to Singapore’s top 10 markets as a whole also increased in 2025, driven by Taiwan, South Korea and the euro zone.

OCBC Bank chief economist Selena Ling said: “This attests to the importance of the AI-related investment boom story to key electronics manufacturing hubs like Taiwan, South Korea and Singapore.”

She added that given the improving global and regional growth outlooks and the carryover momentum in the AI-related investment boom, OCBC has upgraded its NODX growth forecast to match EnterpriseSG’s, up from its previous 1 per cent to 3 per cent range.