Singapore's GDP grew 5.7% year-on-year in the second quarter of 2026, slowing from 6.3% growth in the first quarter, according to advance estimates from the Ministry of Trade and Industry released on July 14 [1, 2, 3, 4, 5, 6, 7, 8, 9]. On a seasonally adjusted quarter-on-quarter basis, the economy expanded 1.1%, down slightly from 1.3% growth in Q1 [1, 2, 3, 4, 9].
Manufacturing output led the growth with a 12.2% year-on-year increase, accelerating from 8.0% in Q1. This surge was driven by robust demand in AI-related semiconductor and precision engineering sectors [1, 2, 3, 4, 8]. The manufacturing sector grew 5.3% quarter-on-quarter in Q2, rebounding from a 2.2% contraction in Q1 [4, 9]. Goods-producing industries overall expanded 10.4% year-on-year, up from 8.4% in Q1 [4, 5].
The services sector growth slowed to 4.6% year-on-year in Q2 from 6.2% in Q1, reflecting some moderation in demand [4, 5]. Construction growth also softened, rising 6.2% year-on-year compared to 12.9% in Q1, with a quarter-on-quarter contraction of 2.1% [2, 4, 8, 9]. Chemicals and biomedical manufacturing saw contractions in Q2 due to feedstock supply disruptions linked to the Middle East conflict [3, 4, 8].
Economists have raised their forecasts for full-year GDP growth in 2026 to between 4.0% and 4.8%, above the Ministry of Trade and Industry's official range of 2% to 4% [6, 7]. OCBC Bank's chief economist Lin Xiumin noted in Mandarin that despite expected growth below last year's 5.0%, Singapore's economy showed strong resilience and adaptability in the first half of the year [6]. Maybank economists Chua Hak Bin and Brian Lee added that first-half growth is running stronger than expected at about 6% year-on-year, helped by upward revisions to Q1 data [7]. DBS senior economist Chua Han Teng said the positive trends including robust trade and services expansion, and tailwinds from domestic construction, are expected to continue but the overall GDP cycle will moderate partly due to high base effects [3].
The Monetary Authority of Singapore tightened monetary policy in April by steepening the slope of the Singapore dollar nominal effective exchange rate policy band, responding to inflation concerns and geopolitical risks. MAS raised its inflation forecast for 2026 to between 1.5% and 2.5% [3, 5, 6].
Despite ongoing geopolitical uncertainties, strong AI-related manufacturing demand has supported Singapore's economic resilience in the first half of 2026 [3, 6, 7, 8]. The next key update will come from official full-year GDP forecasts and inflation data later this year.
