AI Boom, Low Rates & Construction Growth Defy Tariff Risks – Minichart

Report Summary

• Singapore’s GDP growth is forecasted to remain resilient at 2.8% in 2026 and 2.9% in 2027, supported by falling interest rates, a booming AI sector, and a multi-year construction upswing.
• The AI boom is driving robust electronics exports and investments, with Singapore strengthening its position in the global AI supply chain and attracting major tech and R&D investments.
• Construction growth is expected to accelerate to 6% in 2026, with major projects in transport, housing, integrated resorts, and climate infrastructure sustaining activity through 2030.
• Core inflation is projected to normalize to 1.3% and headline inflation to 1.4% in 2026, with the Monetary Authority of Singapore (MAS) likely maintaining a modest appreciation stance, but may tighten policy if inflation surprises on the upside.
• Fiscal space is ample, with strong government revenue growth and potential support measures in Budget FY2026 to address cost pressures and promote skills training.
• Risks include possible fresh US tariffs on semiconductors and pharmaceuticals and property market cooling measures if housing prices surge excessively.
• Financial market activity, loan growth, and retail sales are buoyant, but the F&B sector remains weak amid competition and rising costs.
• Singapore leads ASEAN in AI and cloud spending, with rising adoption rates among businesses, boosting productivity and infocomm services.
• Private property sales and prices are rising due to low mortgage rates, but speculative activity remains muted and government may intervene if needed.
• Key macro indicators show stable unemployment, strong current account and fiscal balance, and falling interest rates supporting economic activity.

Above is an excerpt from a report by Maybank Research Pte Ltd. Clients of Maybank Research Pte Ltd can be the first to access the full report from the Maybank website : https://www.maybank.com/investment-banking