SINGAPORE, Feb 12 (Reuters): Singapore Prime Minister Lawrence Wong spent a big part of his budget speech on Thursday on the adoption of artificial intelligence and strengthening defence capabilities as he described the years ahead as "beset by uncertainties".

"Events in just the first month of 2026 have already been of exceptional scale and consequence. They have increased geopolitical tensions worldwide," said Wong, also the finance minister.

"The years ahead will be beset by uncertainties - from geopolitical tensions to cyber threats and climate risks."

Wong said while the worst fears about the impact of U.S. President Donald Trump's tariffs were not realised in 2025, global resilience was set to be tested far more severely this year.

Singapore's full-year GDP growth for 2025 was 5.0%, although Wong said the overall outlook in 2026 was more moderate.

The trade ministry has forecast 2026 economic growth at 2% to 4%, and Wong said the government aims for growth at the higher end of a 2-3% range over the next decade.

Wong will also chair a new National AI Council to drive AI usage.

"It can help us overcome our structural constraints - our limited natural resources, rapidly ageing population and tight labour market," he said, adding that AI is a factor for success in a "changed world" as the U.S. reassesses its part in global order.

Wong expects AI to transform four key sectors of Singapore's economy: advanced manufacturing, connectivity, finance and healthcare.

BMI senior country risk analyst Lee Yen Nee called the National AI Council a "critical pivot in an era of rapid technological disruption".

National University of Singapore political scientist Chong Ja Ian, however, said there was a need to mitigate risks associated with the heavy AI investment in case it mirrors the dotcom bubble of the 90s.

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