Singapore Banks Raise Growth Outlook on AI-Driven Momentum

United Overseas Bank, Citi, Oversea-Chinese Banking Corp., and Goldman Sachs now project growth between 4.3% and 4.8%, a notable shift from the previous 3.5% to 4.5% range. OCBC chief economist Selena Ling noted that purchasing managers indexes suggest the AI-related manufacturing boom maintains significant momentum. Citi economist Wei Zheng Kit added that headline GDP figures appear increasingly leveraged to capital expenditure in the AI sphere, providing a cushion for industrial production even if export growth slows later this year.

Despite this optimism, risks remain concentrated in external volatility. UOB cautioned that a re-escalation in Middle East tensions could trigger a spike in energy costs, forcing central banks to tighten monetary policy. Associate economist Jester Koh warned that a potential selloff in AI equities, combined with stretched market valuations, might prompt firms to cancel capital expenditure plans, effectively stalling the current electronics cycle.