DBS Group Research said it expects Singapore’s final second-quarter 2026 GDP figures, due for release later this month, to be revised up to 5.9% year-on-year and 1.3% quarter-on-quarter on a seasonally adjusted basis. The forecast, outlined in a research note published this week, points to stronger-than-anticipated momentum in both the manufacturing and services sectors during the April-to-June period.
The projection marks an upward adjustment from the government’s advance estimate, which had initially put second-quarter growth at a slower pace. Singapore’s Ministry of Trade and Industry typically publishes final GDP data several weeks after the preliminary reading, incorporating more complete survey and output data.
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What is driving the upward revision
DBS attributes the expected revision primarily to two pillars of the economy:
- Manufacturing: Electronics production and precision engineering output came in stronger than initially measured, supported by sustained global demand for semiconductors and AI-related components.
- Services: Finance, insurance, and information-communications sectors posted resilient activity, with wholesale trade also contributing positively to the quarterly expansion.
The bank’s economists noted that the quarter-on-quarter seasonally adjusted growth of 1.3% would represent a clear acceleration from the first quarter of 2026, when the economy expanded at a more moderate clip. If confirmed, the revised figures would mark one of the strongest quarterly performances Singapore has recorded in recent years, supported by a global tech upcycle that has disproportionately benefited the city-state’s export-oriented manufacturing base.
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Full-year forecast upgraded
As a result of the stronger second-quarter trajectory, DBS has also lifted its full-year 2026 GDP growth forecast for Singapore. The bank now sees the economy expanding at a faster pace than its previous projection, citing carry-over momentum from the first half and continued resilience in external demand.
The upgrade aligns Singapore with a broader trend across Southeast Asia, where several export-dependent economies have benefited from the ongoing artificial intelligence infrastructure buildout. Regional peers such as Malaysia and Vietnam have similarly reported firmer manufacturing activity through the first half of 2026.
However, DBS also flagged risks to the outlook, including persistent geopolitical tensions affecting trade routes and the potential for tighter global financial conditions in the second half of the year. The bank noted that domestic consumption, while stable, has not shown the same strength as externally oriented sectors.
What to watch in the final GDP release
Market participants will be closely watching the final GDP release for details on the services sector breakdown, particularly whether the finance and insurance segments sustained their momentum through June. The data will also inform the Monetary Authority of Singapore’s policy stance heading into its next scheduled review, with stronger growth potentially reducing pressure for any near-term easing.
For businesses and investors, the revised figures reinforce a constructive outlook for Singapore’s trade-dependent economy in 2026, though the second-half trajectory will hinge on global demand holding up amid ongoing uncertainty in major export markets.
This article is for informational purposes only and does not constitute financial advice. Economic forecasts are inherently uncertain and subject to revision; readers should conduct their own research before making any financial decisions.
