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

Singapore’s economy expanded 5.7% in the second quarter, topping market expectations, on the back of strong growth in the manufacturing sector.

Growth was higher than the 5.5% expected by economists polled by Reuters, but lower than the revised 6.3% seen in the first quarter, according to a release from the country’s Ministry of Trade and Industry.

The goods sector expanded 10.4% from the 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 2Q26 advance GDP estimates indicate that the economy remained resilient despite the shock stemming from tensions in the Middle East,” said Chua Han Teng, senior economist at DBS Bank said in a note.

He expects robust trade-related performance and tailwinds from domestic construction to continue into the next few quarters, but warned that GDP was likely to moderate going forward due to high base effects.

In May, Singapore’s Ministry of Trade and Industry projected that GDP growth for 2026 at 2%-4%, “although downside risks have risen significantly as a result of the US-Israel-Iran conflict,” it said.

The advance GDP data comes 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 monetary policy by influencing the Singapore dollar’s value against the currencies of its main trading partners within an undisclosed trading band, known as the Singapore dollar nominal effective exchange rate, or S$NEER.

The Singapore dollar traded at 1.294 against the greenback, marginally weaker after the data release.

The GDP data also comes as inflation in the city-state held steady at 1.8% in May, its joint-highest level since September 2024.

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