Singapore Economy Grows 5.7% Despite Middle East Conflict Impact

The Monetary Authority of Singapore (MAS) has reported that the country's economy grew at a rate of 5.7% year-on-year in the second quarter, despite the impact of the Middle East conflict on oil-related industries.

The AI supercycle has provided significant support to the domestic outlook, particularly across technology-related segments. These sectors, which account for about 22% of GDP, grew at a rate of 21% year-on-year in the second quarter. Electronics production rose by 38% in April and May due to strong demand for memory chips, AI servers, and related infrastructure.

Real electronics domestic exports increased by 79%, with MAS projecting that technology-related industries will account for the bulk of the economy's expansion in the full year. In contrast, oil-related industries contracted an estimated 11% year-on-year in Q2, while chemicals manufacturing output fell by 14%. However, MAS notes that the primary impact of Middle East developments on Singapore has been more in inflation rather than growth.