Singapore's Economy Surges Beyond Expectations on AI-Driven Chip Demand

Singapore's economy increased more than predicted in the third quarter, as a rush for everything related to artificial intelligence (AI) drove up demand for computer processors. According to the sources

The Singaporean Ministry of Trade and Industry reported a solid resurgence in the main manufacturing sector, which drove the 4.1 percent year-on-year increase from July to September.Economists forecasted growth of less than 4%.

Manufacturing, which includes computer chips, increased 7.5 percent year on year, rebounding from a 1.1 percent fall in the preceding three months.

In August, the government raised its prediction for this year's economic growth from 1 to 3 percent to 2 to 3 percent.

Singapore uses the exchange rate — the Singapore dollar is fixed to a basket of currencies from its important trade partners — to combat inflation because it imports the majority of its needs.

The central bank said, “For the rest of 2024, Singapore’s growth should be sustained by the ongoing upswing in the electronics and trade cycles, as well as the easing in global financial conditions”

Separately, Singapore blocked a S$2.2 billion (US$1.68 billion) agreement that would have allowed German insurance giant Allianz SE to acquire a majority position in a local insurer.

In July, Allianz announced a "pre-conditional voluntary cash general offer" to buy at least 51% of Singapore's Income Insurance Ltd for S$40.58 per share, as it looks to increase its footprint in Singapore and Asia.