Singapore’s economy expanded faster than expected during the second quarter of 2026, supported by strong demand for artificial intelligence-related products.
However, economic growth slowed from the four-year high recorded during the previous quarter, as weaker activity in services and construction limited the overall expansion.
Singapore GDP Growth Exceeds Expectations
Singapore’s gross domestic product increased by 5.7% year-on-year during the three months ending June 30, according to advance estimates released by the Ministry of Trade and Industry.
The result exceeded market expectations for growth of 5.5%.
Nevertheless, the expansion slowed from the revised 6.3% growth recorded during the first quarter of 2026.
On a quarter-on-quarter basis, Singapore’s economy grew by 1.1%, matching economists’ forecasts.
AI Demand Boosts Manufacturing Activity
Manufacturing was the main contributor to Singapore’s stronger-than-expected economic performance.
The sector expanded by 10.4% during the second quarter, accelerating from growth of 8.4% in the previous three-month period.
Electronics and precision engineering companies benefited from rising global demand for artificial intelligence technology, advanced chips and related equipment.
This AI-driven demand helped strengthen Singapore’s exports and supported industrial production throughout the quarter.
Middle East Conflict Weighs on Some Industries
Despite the strength in electronics, other manufacturing segments faced greater pressure.
Growth in the chemicals and biomedical industries was affected by disruptions linked to the conflict in the Middle East.
These disruptions created challenges for supply chains, trade routes and production activity in sectors that depend heavily on international shipments.
Services and Construction Growth Slows
Growth in Singapore’s services-producing industries slowed to 4.6% in the second quarter, compared with 6.2% during the previous quarter.
The construction sector also lost significant momentum.
Construction activity grew by 6.2%, sharply below the 12.9% expansion recorded in the first quarter.
The slowdown in these areas suggests that Singapore’s economic recovery is becoming increasingly dependent on manufacturing and technology-related demand.
Singapore Economy Retains Strong Momentum
The latest figures show that Singapore’s economy maintained much of the momentum seen at the beginning of 2026.
Strong demand for AI-linked electronics continued to support manufacturing, exports and overall GDP growth.
However, weaker services and construction activity highlighted signs of cooling across other parts of the economy.
Geopolitical disruptions linked to the Middle East conflict also remain an important risk to Singapore’s growth outlook.
Full Singapore GDP Data Due in August
The latest figures are advance estimates based mainly on economic data collected during the first two months of the quarter.
The Ministry of Trade and Industry is expected to release Singapore’s complete second-quarter GDP report in August.
The final data will provide a more detailed picture of the economy’s performance and the outlook for growth during the second half of 2026.
