Singapore’s economy expanded by 5.7% in the second quarter, beating expectations

Singapore’s economy grew by 5.7% in the second quarter on the back of strong growth in manufacturing, beating market expectations.

The country’s Ministry of Trade and Industry said the growth rate was higher than the 5.5% expected by economists polled by Reuters, but lower than the revised 6.3% for the first quarter.

Growth in the goods sector was 10.4%, up from 8.4% in the previous quarter, while growth in the services sector slowed to 4.6% from 6.2% in the first quarter.

“Singapore’s advanced GDP estimates for the second quarter of 2026 show that the economy remains resilient despite the shock stemming from tensions in the Middle East,” Chua Han Teng, senior economist at DBS Bank, said in a note.
He expects strong trade-related performance and domestic construction tailwinds to continue in the coming quarters, but cautioned that GDP is likely to slow going forward due to high base effects.

Singapore’s Ministry of Trade and Industry predicted in May that GDP growth would be between 2% and 4% in 2026, although downside risks have increased significantly as a result of the U.S.-Israel-Iran conflict.

The preliminary GDP figures were released as Singapore’s central bank prepares to announce its quarterly monetary policy decision later this month.

Instead of using interest rates, the city-state manages its monetary policy by influencing the value of the Singapore dollar against the currencies of its major trading partners within a private trading range known as the Singapore Dollar Nominal Effective Exchange Rate (S$NEER).

The Singapore dollar was trading at $1.294 against the US dollar, slightly weaker after the data was released.

The GDP figures were also released as the city-state’s inflation rate held steady at 1.8% in May, the highest level since September 2024.

MAS said in its CPI release that global energy prices remain elevated compared to 2025, forecasting full-year inflation of 1.5% to 2.5%.