Singapore’s AI-led economic growth set to continue in 2027: MAS

Even if capital expenditure is affected by financial vulnerabilities, there are substantial order backlogs and capacity expansions that have been committed to, which would cushion the near-term impact on production.

Industry forecasts for chip sales growth, together with increases in new orders, suggest that the AI-led semiconductor cycle is more likely to remain in a phase of expansion, said MAS.

The second consideration affecting the durability of Singapore’s current economic expansion is whether capacity constraints in the technology-related sectors will constrain the pace of further growth.

The central bank noted that significant additions are expected to come online in 2027 and 2028. 

For example, Micron has embarked on multi-year investments, while GlobalFoundries and UMC are ramping up capacity.

“As additional production capacity comes onstream, firms could ramp up output further,” said MAS.