Singapore upgrades 2026 key exports growth forecast to 3-5% as electronics shipments power Q1 expansion

[SINGAPORE] Enterprise Singapore (EnterpriseSG) has upgraded the Republic’s non-oil domestic exports (NODX) forecast for 2026 to 3 to 5 per cent, from 2 to 4 per cent previously. This is underpinned by the better-than-expected Q1 2026 performance, particularly in electronics.

Notwithstanding uncertainties from the Middle East conflict and potential re-escalation of trade tensions, Q1’s key exports growth came in at 9.6 per cent, following the 12.7 per cent expansion in Q4 2025, said EnterpriseSG in its quarterly trade review released on Monday (May 25) morning.

The agency said that since its previous update in February, “the global economy has remained more resilient than expected, supported by robust artificial intelligence-related demand”.

It added that the World Trade Organization (WTO) had raised its 2026 global merchandise trade volume growth forecast to 1.9 per cent, from 0.5 per cent previously. According to EnterpriseSG, this reflected “continued strength in AI-related trade and a smaller-than-expected drag from tariffs”.

The International Monetary Fund (IMF) had likewise upgraded its global trade volume growth forecast for 2026 to 2.8 per cent, from 2.6 per cent previously, the agency noted.

Domestically, EnterpriseSG said a strong double-digit net weighted percentage of firms – particularly in the electronics and precision engineering clusters – expect overseas deliveries to improve in Q2, at 43 per cent and 49 per cent, respectively.

Overall, business sentiment in the manufacturing sector for the next six months improved to a net weighted balance of 17 per cent, from 11 per cent in the previous quarter, said EnterpriseSG.

Taking these factors into account, the agency raised its NODX forecast. 

However, it noted that the updated projection remained consistent with the IMF and WTO’s expectations of softer global trade growth in 2026, while also factoring in high base effects in the second half of the year.

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Meanwhile, EnterpriseSG warned that downside risks to the outlook include a prolonged conflict in the Middle East and a potential re-escalation of trade tensions.

First-quarter performance

Electronic shipments expanded by 57.8 per cent in Q1, up from the 23.4 per cent increase the previous quarter. 

This was due to disk media products (81.6 per cent), integrated circuits (80.6 per cent) and PCs (36.6 per cent).

Non-electronic NODX declined 3.5 per cent in Q1, reversing Q4’s 9.4 per cent growth, mainly due to food preparations (-47.4 per cent), petrochemicals (-23.7 per cent) and measuring instruments (-13.7 per cent).

Overall, NODX to Singapore’s top markets expanded in Q1. The biggest contributors to the increase were Hong Kong (49.2 per cent), Taiwan (43.4 per cent) and South Korea (41.3 per cent).

Non-oil re-exports expanded by 45.4 per cent in Q1, extending the 19.7 per cent increase in the previous quarter.

Total merchandise trade rose 25.6 per cent in Q1 to S$409 billion, up from the 14.5 per cent increase recorded in the previous quarter.

Total services trade expanded 4.4 per cent in the quarter to S$275 billion, higher than the 2.2 per cent increase in Q4.