Singapore's Ministry of Trade and Industry raised its 2026 gross domestic product growth forecast to 4.5 to 5.5 percent year-on-year, up from a previous 2.0 to 4.0 percent, citing better-than-expected first-half performance and an improved outlook due to "the acceleration in global AI-related capital expenditure." Growth in the second quarter was driven by manufacturing, wholesale trade, and the finance and insurance sectors. Strong AI-related demand boosted the electronics and precision engineering clusters of manufacturing, as well as the machinery, equipment and supplies segment of wholesale trade. The government expects global AI-related demand to cushion the economy from the impact of war in the Middle East, noting that AI investment has been "stronger than expected" while the Iran war's impact on the wider global economy has been "less severe than initially feared."