Singapore's economy grew 5.7% year over year in the second quarter, easing from 6.3% in the previous three months, according to advance estimates released by the Ministry of Trade and Industry on Tuesday.
The reading surpassed the consensus forecast of a 5.5% increase, as tracked by Investing.com.
On a seasonally adjusted quarterly basis, gross domestic product expanded 1.1% in the second quarter, extending the 1.3% growth recorded in the first quarter.
The goods-producing industries grew 10.4% from a year earlier, led by a 12.2% expansion in manufacturing, while construction growth slowed to 6.2% from 12.9% in the previous quarter.
Manufacturing growth accelerated from 8.0% in the first quarter, driven by stronger output in the electronics and precision engineering clusters amid robust artificial intelligence-related demand for semiconductors and semiconductor manufacturing equipment.
The ministry said manufacturing growth was "largely driven by output increases in the electronics and precision engineering clusters on account of strong AI-related demand for semiconductors and semiconductor manufacturing equipment."
The chemicals and biomedical manufacturing clusters contracted, with the chemicals segment affected by feedstock disruptions linked to the Middle East conflict.
The stronger-than-expected economic growth comes as economists expect the Monetary Authority of Singapore to keep monetary policy unchanged at its next meeting later this month after May core inflation held steady at 1.4%, despite higher prices stemming from the Middle East conflict.
The MAS tightened policy in April and raised its 2026 core inflation forecast to 1.5% to 2.5% from 1% to 2%.
Singapore's central bank is scheduled to announce its next policy decision by July 31.
In May, the Ministry of Trade and Industry maintained Singapore's 2026 GDP growth forecast at 2% to 4%, citing resilient AI-related demand despite rising downside risks from the U.S.-Israel-Iran conflict.
The ministry said strong demand for AI-related semiconductors, semiconductor manufacturing equipment and digital solutions should continue to support the electronics, precision engineering and information and communications sectors.
However, it warned that higher energy costs and weaker global demand could weigh on the chemicals, fuels, and transportation industries.
