The Singapore government has raised its 2026 economic growth outlook, driven by stronger-than-anticipated performance in the first half of the year, though officials have cautioned that global economic conditions remain fragile.

Revised data released by the Ministry of Trade and Industry (MTI) on Tuesday showed the economy expanded by 5.9% year-on-year in the second quarter. This compares with the ministry's preliminary estimate of 5.7% growth for the April-to-June period, following a 6.3% expansion in the first quarter. For the first half of 2025, the economy grew by 6.1% on an annual basis.

The MTI has upgraded its 2026 growth forecast to a range of 4.5% to 5.5%, up from the previous projection of 2.0% to 4.0%. The Singapore economy recorded 5.0% growth in 2025.

The ministry attributed the upward revision to the stronger-than-expected first-half performance and an improved outlook for the remainder of the year, fueled by an acceleration in global capital expenditure related to artificial intelligence. However, the MTI warned of risks, including a potential escalation of the Middle East conflict, which could spark a renewed surge in energy commodity prices and other key intermediate inputs.

"The resulting rise in inflationary pressures and tightening of global financial conditions could dampen global growth," the ministry stated.

On a seasonally adjusted quarter-on-quarter basis, the economy grew by 1.4% in the second quarter, up from the preliminary estimate of 1.1% and compared with a revised 1.2% expansion in the first quarter.