Analysts clash over 5.0% export forecast amidst AI risks

UOB raises its forecast to 5.0% on surging AI tailwinds, whilst RHB maintains conservative 3.0% target.

Experts remain positive on their projections for Singapore’s full-year non-oil domestic exports (NODX) amidst artificial intelligence (AI)-related tailwinds expected to persist in the first half of 2026.

UOB Global Economics and Markets Research even raised its 2026 NODX growth projection to 5.0% from 3.0%.

“We assess that AI-related tailwinds could persist at least through the first half of 2026, as evidenced by recent data such as the rise in Singapore’s Jan electronics PMI (51.1; Dec: 50.9), led by improvements in the new export orders (51.2, Dec: 50.9) and future business (51.1, Dec: 50.8) subindices, pointing to firm demand momentum in the coming months,” the analysis read.

Latest government data showed that the city-state’s NODX rose 9.3% year-on-year in January. This expansion was driven by electronics, which grew 56.1% in the same month, according to an Enterprise Singapore report.

This was supported by strong demand for AI-related products and a low base a year earlier, when electronic NODX stood at $3.1b during the Lunar New Year period, below the 2025 monthly average of $3.7b.

Meanwhile, RHB said it is "cautiously optimistic on Singapore’s NODX performance for the year ahead."

"For 2026, we keep our full-year NODX forecast at 3.0%, in line with official’s projection range of 2% to 4%,” its latest analysis read.

RHB said its projection is supported by a strong global and domestic landscape amidst easing global monetary conditions. Global economy is projected to accelerate to 3.5% to 3.7% in 2026, from an estimated 3.2% to 3.3% in 2025, driven by firm consumption, steady investment flows, and sustained risk appetite among investors.

Whilst its outlook remains positive, RHB warned about external downside risks amidst escalating geopolitical tensions and a potential AI-driven market correction.

"MAS noted that GDP [gross domestic product] growth is expected to ease from the strong 2025 outturn, with the positive output gap narrowing over the year. This is consistent with our 3.0% GDP growth forecast, moderating from the stronger-than-expected 5.0% expansion in 2025,” it said.

The Ministry of Trade and Industry upgraded its 2026 GDP growth projection to 2% to 4% from the previous forecast of 1% to 3%. The projected range is slightly lower than the 5% expansion recorded in 2025.

By the second half of the year, RHB expects NODX to grow moderately due to a high base effect seen in the same period in 2025.

“NODX increased for the fifth consecutive month in January, following the last decline of -11.5% in August, indicating that Singapore’s trade-dependent economy remains resilient amid global trade uncertainties,” the report read.