Singapore: Growth risks tilt lower – UOB

UOB’s Senior Economist Alvin Liew reviews Singapore’s latest industrial production data and maintains the 2026 GDP growth forecast at 3.6%, with 2027 at 2.0%. The bank highlights broad-based weakness in February IP, despite continued AI-related support for electronics. It now judges that downside risks to Singapore’s growth outlook have increased, particularly via manufacturing and trade channels.

IP weakness clouds GDP outlook

"Singapore’s industrial production (IP) weakened more than expected in Feb and contracted by -7.2% m/m sa, translating to a -0.1% y/y decline, against Bloomberg consensus’ and our forecast of -0.8% m/m, +14.1% y/y."

"We maintain our 2026 GDP growth forecast for Singapore at 3.6% for now (2027: 2.0%); however, we now assess that risks are likely tilted towards the downside."

"While Singapore’s GDP growth continues to benefit from AI-related momentum in early 2026, downside risks could intensify should the US/Israel–Iran conflict persist for longer (beyond one quarter), primarily through a sharp drag on the manufacturing sector (~21% of GDP), with adverse spillovers to the wholesale trade (~13% of GDP) and transportation & storage (~6% of GDP) sectors."

"External demand may be dampened by weaker sentiment and supply-chain disruptions, which in turn would weigh on Singapore’s exports."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)