GDP Seen Hitting 4.6% as AI Drives NODX Higher: Nomura

Singapore's economy is on track to grow 4.6 percent this year, according to Nomura, powered by an AI-driven export boom that has pushed non-oil domestic exports (NODX) to a stunning 38.4 percent year-on-year surge in May. The new forecast sits well above the government's official estimate of 2 to 4 percent and signals that the Republic's bet on AI-linked manufacturing is paying off more quickly than many analysts expected.

May's trade data, released this week, showed electronics exports jumping 94.8 percent year-on-year, with integrated circuits climbing 80.9 percent and disk media products skyrocketing 227.8 percent. Even excluding pharmaceuticals and gold, underlying NODX growth hit 31.2 percent, up from 20.3 percent in April, suggesting the demand surge is broad-based rather than concentrated in a handful of categories. RHB has maintained its full-year NODX forecast at 7.5 percent, flagging further upside bias.

Nomura expects the strong export performance to boost manufacturing output and spill over into the services sector, which underpins its above-consensus GDP call. However, RHB has flagged several risks that could slow momentum, including geopolitical tensions in the Middle East, potential US tariffs, and what it describes as "exuberance" in AI-linked asset valuations, though it stops short of calling it a confirmed bubble.

Why it matters for Singapore: These numbers make explicit what has been quietly happening beneath the surface: AI infrastructure demand is becoming a structural driver of Singapore's economic growth, not just a tech-sector sideshow. The 4.6 percent GDP projection, if realised, would be among Singapore's strongest growth years in over a decade, and it is being fuelled almost entirely by exports of the chips, servers, and components that underpin the global AI buildout. That makes the health of the AI supply chain a direct concern for Singapore's broader economic outlook, not just its tech industry.