Singapore GDP Grows 5.7% Amid Global Trade Tensions

The Ministry of Trade and Industry of Singapore reported that Singapore's economy expanded by 5.7% in the second quarter of 2026. While this figure represents a deceleration from the 6.3% growth recorded in the first quarter, it exceeded economist expectations of 5.5%.

Growth was primarily propelled by a 12.2% surge in manufacturing, fueled by strong AI-related demand for precision engineering equipment and semiconductors. Conversely, the economy faced headwinds from contractions in the biomedical and chemicals clusters, alongside slowing expansion in wholesale trade and construction.

Economic outlooks remain volatile due to the collapse of a June ceasefire between the United States and Iran. Hostilities led to the blockade of the Strait of Hormuz, which disrupted energy supplies and increased oil prices. Donald Trump announced on July 13 that the United States would resume the blockade on Iranian vessels and implement a 20% reimbursement fee on other cargo.

Despite these geopolitical disruptions and warnings from Prime Minister Lawrence Wong regarding higher inflation and slower growth in the second half of the year, the government maintained its full-year 2026 growth forecast between 2.0% and 4.0%.