Revised Q2 GDP growth and raised 2026 forecasts bolster the Singapore Dollar amid easing USD/SGD exchange rates.
Singapore’s economy expanded 6.1% year-on-year in the first half of 2026, prompting the Ministry of Trade and Industry to raise its full-year GDP forecast to 4.5–5.5% from 2.0-4.0%. The upgrade reflects stronger-than-expected performance in H1 and an improved outlook for H2, driven by AI-related capital expenditure and robust financial services.
Manufacturing growth was revised upward to 12.5% year-on-year in Q2, up from an initial 12.2%, fueled by semiconductor and chip-making equipment demand. Non-oil domestic exports (NODX) surged 18.6% in H1, leading Enterprise Singapore to sharply raise its 2026 NODX growth forecast to 14-16% from 3-5%.
Despite downside risks, including potential Middle East conflict escalation, the stronger economic data pushed USD/SGD down 0.1% to 1.2797, extending its decline from late-June highs near 1.3000.