This aerial view taken from a commercial flight shows cargo ships docked along the strait in Singapore on April 7, 2025.<\/p>\n
Mohd Rasfan | Afp | Getty Images<\/p>\n
Singapore’s economy expanded faster than expected in the third quarter, even as the country’s central bank warned that growth is likely to slow in 2026.<\/p>\n
Gross domestic product rose 2.9% year on year in the three months through September, the Ministry of Trade and Industry said Tuesday.<\/p>\n
That beat economists’ forecasts for a 1.9% increase, though it marked a slowdown from a revised 4.5% expansion in the second quarter.<\/p>\n
On a seasonally adjusted, quarter-on-quarter basis, the economy expanded by 1.3%, easing slightly from 1.5% in the previous quarter.<\/p>\n
Manufacturing was the main drag on growth, flattening after a 5% expansion in the second quarter. The construction sector also softened, rising 3.1% year on year compared with 6.2% in the prior quarter.<\/p>\n
“Growth was weighed down by output declines in the biomedical manufacturing and general manufacturing clusters, even as output in the other manufacturing clusters expanded,” MTI said in a statement.<\/a><\/p>\n Growth in the services sector slowed to 0.2% from 1.7%, dragged down by contractions in wholesale and retail trade, as well as transportation and storage.<\/p>\n “While this marks a slowdown from 4.5% y-o-y in Q2, partly due to high base effects from a year ago, it nonetheless reflects a resilient pace of growth amid global trade headwinds,” Lloyd Chan, senior currency analyst at Mitsubishi UFJ Financial Group, wrote in a note after the data release.<\/p>\n MAS decision<\/p>\n The economic slowdown comes as Singapore’s central bank left its policy settings unchanged<\/a>, maintaining its stance from July<\/a>.<\/p>\n The Monetary Authority of Singapore said that GDP growth is expected to moderate as activity “normalises” in trade-related sectors.<\/p>\n Global investment in artificial intelligence is expected to support Singapore’s manufacturing sector, the central bank said, while construction and financial services should benefit from infrastructure spending and accommodative financial conditions.<\/p>\n “In 2026, GDP growth is projected to slow in line with external developments to a near-trend pace, such that the output gap narrows to around 0%,” MAS said in a statement.<\/p>\n Vishnu Varathan, managing director at Mizuho Securities, said that there were “no surprises” in the MAS’ decision, despite significant declines in headline and core inflation in the run-up to this decision.<\/p>\n