Singapore upgrades 2026 key exports growth forecast to 2-4% as global outlook improves

[SINGAPORE] Enterprise Singapore (EnterpriseSG) has upgraded the Republic’s non-oil domestic exports (NODX) growth forecast for 2026 to 2 to 4 per cent, from zero to 2 per cent previously, on the back of a slightly improved global economic outlook.

Key exports growth will be supported in part by electronics amid strong artificial intelligence (AI)-related demand, the agency said in its quarterly trade review released on Tuesday (Feb 10) morning.

EnterpriseSG said its new 2026 full-year forecast is “consistent with the International Monetary Fund’s (IMF) projection of softer growth in global trade volumes in 2026”.

But the overall pace is expected to moderate, after full-year 2025 key exports growth came in at a stronger-than-expected 4.8 per cent, extending 2024’s 0.2 per cent rise.

Electronics shipments expanded by 12.7 per cent in 2025, up from the 8.2 per cent increase the year before. This was due to integrated circuits (16.3 per cent), PCs (65.1 per cent) and disk media products (13.3 per cent).

Noting strong AI-related demand in Q4 2025 in particular, EnterpriseSG added: “This momentum is expected to carry into 2026 as export orders for the electronics segment remained strong, with firms expecting higher orders in Q1 2026.”

Non-electronics NODX grew 2.5 per cent last year, reversing from a 1.9 per cent decline in 2024. Non-monetary gold (56 per cent), pharmaceuticals (10.6 per cent), and structures of ships and boats (188.9 per cent) were the key drivers.

A “year-end surge” in non-monetary gold and pharmaceuticals contributed notably to full-year 2025 NODX growth, EnterpriseSG said, adding that this was “driven respectively by high gold prices amid demand for safe-haven assets and a boost in pharmaceuticals output in Q4 2025”.

Noting that NODX growth in 2025 was driven more by electronics products than non-electronics shipments, DBS senior economist Chua Han Teng said incoming forward-looking data at the start of 2026 suggests a continuation of this trend in the coming months.

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“For instance, new export orders for electronics products in Singapore’s electronics purchasing managers’ index (PMI) rose further in January 2026, returning to levels last seen in February 2025.”

He expects sustained global AI-related tailwinds and demand for Singapore’s server products and memory chips to support electronics NODX.

Conversely, new export orders under the headline manufacturing PMI remain weaker and have yet to recover to the March 2025 pre-Liberation Day reading, he added.

“We remain cautious on the outlook for non-electronics NODX, as they will likely face downside pressures from the lingering and delayed impact of higher US tariffs globally.”

As a whole, EnterpriseSG noted an improved external economic outlook for 2026, notwithstanding continued uncertainty.

The IMF upgraded its global growth forecast to 3.3 per cent, from 3.1 per cent, it noted. EnterpriseSG also highlighted growth outlook upgrades for “most of its key trading partners”, naming China, the US, the euro area and Asean-5.

“On the trade front, the World Trade Organization highlighted that the rapid acceleration of AI may lead to higher overall growth in global merchandise trade in 2026 than its projection of 0.5 per cent,” it added.

EnterpriseSG raised its forecast for these reasons. It expects that robust AI-related demand and high gold prices will continue to support NODX growth.

But downside risks include an escalation in trade tensions or a correction in AI-related investment demand.

OCBC also upgraded its 2026 NODX projection to 2 to 4 per cent, from 1 to 3 per cent previously. Chief economist Selena Ling said this was due to the improving global and regional growth outlooks, as well as carry-over momentum in the AI-related investment boom.

Overall, NODX to Singapore’s top markets expanded in 2025. The biggest contributors to the increase were Taiwan (37.4 per cent), South Korea (21.7 per cent) and the European Union (12.2 per cent).

Electronics NODX to top markets grew, led by South Korea (41.6 per cent), Taiwan (16.9 per cent) and Malaysia (12 per cent).

The rise in non-electronics NODX was driven by Taiwan (53.8 per cent), the EU (13.8 per cent) and South Korea (14.9 per cent).

Ling said these figures attest to the importance of the AI-related investment boom story to key electronics manufacturing hubs such as Taiwan, South Korea and Singapore.

Total merchandise trade rose 8.7 per cent to S$1.4 trillion in 2025, up from the 6.6 per cent increase recorded in the previous year.

Total services trade expanded 3.3 per cent last year, following 2024’s 13 per cent jump, with both imports and exports growing.

Final-quarter performance

In the fourth quarter alone, NODX expanded 12.7 per cent, from a 3.4 per cent contraction recorded in the preceding quarter.

Electronics shipments for Q4 climbed 23.4 per cent, higher than the previous quarter’s 7.1 per cent increase. Meanwhile, non-electronics shipments grew 9.4 per cent, compared with the 6.5 per cent contraction in the preceding quarter.

Total merchandise trade rose 14.5 per cent in Q4 2025, up from the 8.2 per cent recorded a quarter earlier.

Total exports expanded by 15 per cent, up from Q3 2025’s 8.2 per cent. Non-oil exports (17.6 per cent) drove growth, while oil exports declined (minus 0.4 per cent).

Total imports rose by 14.1 per cent, extending the previous quarter’s 8.6 per cent growth.

In Q4 2025, total services trade grew 2.2 per cent, up from the 2 per cent rise reported a quarter earlier. Services exports expanded by 2.3 per cent, and imports rose 2.1 per cent in Q4 2025.