Singapore's economic performance in the first quarter has significantly exceeded expectations. The global artificial intelligence boom has driven growth in the country's manufacturing and service sectors, offsetting the drag from rising crude oil prices.

The Ministry of Trade and Industry of Singapore announced on Monday that the seasonally adjusted quarter-on-quarter GDP growth for the first quarter was 1%, far surpassing the median forecast of 0.2% from a media survey. The Singapore government had previously projected a GDP contraction of 0.3%.

Singapore's electronics exports have benefited from AI-related demand, which has helped the Lion City withstand the energy shock triggered by the conflict in Iran to some extent. The Ministry of Trade and Industry maintained its forecast for GDP growth of 2% to 4% in 2026, consistent with the outlook released in February. In contrast, Singapore's economy grew by 5% last year.

In a statement, the ministry noted that if global AI-related capital expenditure continues, it will further drive growth in the electronics and precision engineering industries. However, the ministry also highlighted several risks, including ongoing disruptions to global energy supplies, potential further tariff increases by the United States, and a sudden decline in global AI-related capital expenditure.