Investing Updates: CNA Explains: What's driving Singapore's exceptional economic growth, and can it last?

Source:

https://www.channelnewsasia.com/singapore/gdp-ai-trade-manufacturing-economy-5919481

ChatGPT:

Singapore’s economy has recorded exceptional growth for two consecutive years, expanding 5.3 per cent in 2024 and 5 per cent in 2025 — the first time since 2010 and 2011 that it has sustained above 5 per cent growth for two straight years. This performance exceeded earlier government forecasts, prompting the Ministry of Trade and Industry (MTI) to upgrade projections twice in 2025. For 2026, growth is now expected at 2 to 4 per cent.

The strong expansion was driven primarily by manufacturing, wholesale trade, and finance and insurance. In particular, surging global demand for artificial intelligence (AI)-related electronics significantly boosted the electronics and machinery segments. Pharmaceuticals also outperformed expectations due to high-value production, while construction remained resilient with strong project pipelines. Economists highlighted broad-based growth supported by robust foreign direct investment, safe-haven capital inflows, and accommodative financial conditions.

Singapore also benefited from relatively lower US tariffs compared to regional peers, as semiconductors and pharmaceuticals were largely exempt. Additionally, global firms front-loaded production and exports ahead of tariff hikes, further lifting activity.

Economists described the growth as unusual for a mature, developed economy, especially since it was not driven by recovery from a crisis. Similar AI-driven gains were seen in Taiwan, Malaysia, Vietnam and Indonesia, reflecting a wider regional electronics boom.

However, sustaining 5 per cent growth may be difficult due to a high base effect, external risks, softer labour market conditions and moderating momentum in late 2025. While analysts believe growth could exceed 3 per cent if Singapore successfully strengthens its position as an AI hub, matching the recent 5 per cent pace is considered unlikely. Nonetheless, officials remain optimistic that AI will remain a key long-term growth pillar.

Comments:

Singapore is conservative? It's in our roots 😋

I'm more concerned about the upcoming and future TFR data. Imo, it has a deep impact on future generations and society norms.