A woman walks past the financial business district highrise buildings in Singapore on May 19, 2026. (Photo by Roslan RAHMAN / AFP)
Singapore's economy grew six percent year-on-year in the first quarter as demand skyrockets for artificial intelligence chips, balancing the fallout from the Middle East war, the government said on May 25.
As a major electronics hub, the city-state has seen a significant increase in the production of memory chips and server components that are essential for the data centers that power AI tools.
Due to the "better-than-expected" growth, the trade ministry said it would maintain its forecast for the economy to expand 2 to 4 percent in 2026.
That is despite the impact wrought on economies worldwide by the conflict in the Middle East.
The ministry warned that "downside risks to Singapore's economic outlook have risen significantly," saying it would monitor global developments and adjust forecasts if necessary.
The first-quarter growth, extending expansion of 5.7 percent in the December 2025 quarter, was "driven by strong performance of the wholesale trade, manufacturing and finance and insurance sectors", the ministry said in a statement.
As an export-oriented economy with a small domestic market, Singapore is usually seen as a bellwether for international trade.
Governments and tech companies worldwide are pouring hundreds of billions of dollars into building data centres that can power AI tools such as chatbots, image generators and agents.
