Singapore (VNA) – Singapore's economy grew at a slower pace in the second quarter of 2026 as heightened uncertainty stemming from the conflict in the Middle East weighed on the trade-dependent economy, according to the country’s Ministry of Trade and Industry.
The ministry reported on July 14 that Singapore's gross domestic product (GDP) expanded by 5.7% year-on-year in the April–June period, easing from the 6.3% growth recorded in the first quarter.
On a seasonally adjusted quarter-on-quarter basis, GDP grew by 1.1% in Q2, compared with 1.3% in the previous quarter.
MTI attributed the moderation in growth primarily to slower expansion in several sectors, including construction, wholesale and retail trade, as well as transportation and storage. Construction output rose 6.2% year-on-year, down sharply from the 12.9% increase in the first quarter. Meanwhile, the combined wholesale and retail trade, transportation and storage sectors grew by 6.3%, compared to 9.3% in the January–March period.
In contrast, the manufacturing sector remained the main driver of Singapore's economic growth, expanding 12.2% year-on-year in the second quarter, up from 8% in the previous one.
According to MTI, the strong performance was largely supported by robust demand for semiconductors and semiconductor manufacturing equipment amid the rapid expansion of artificial intelligence (AI), boosting output in the electronics and precision engineering industries.
However, the chemicals and biomedical manufacturing sectors contracted as disruptions to raw material supplies caused by the conflict in the Middle East weighed on production.
On a seasonally adjusted quarter-on-quarter basis, manufacturing grew by 5.3%, reversing the 2.2% contraction recorded in the first quarter.
Exports also maintained strong momentum. Singapore's non-oil domestic exports (NODX) surged 38.4% year-on-year in May, following a 24.4% increase in April, driven mainly by robust AI-related demand.
Meanwhile, Singapore's core inflation remained unchanged at 1.4% in May from the previous month. However, economists warned that persistently high energy prices could continue to push up production and transportation costs, as well as the prices of imported goods, posing risks to the country's economic growth outlook./.
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