Singapore’s GDP grew by 5.4% in third quarter of 2026

SINGAPORE – Singapore’s economy grew by 5.4% in the third quarter, moderating from 6.2% in the previous quarter.

This was higher than the 5.1% consensus estimate in a Bloomberg poll.

On a quarter-on-quarter seasonally adjusted basis, the economy expanded by 1.1%, easing from the 1.5% growth in the second quarter, said the Ministry of Energy, Trade and Industry (METI) on Oct 14.

The manufacturing sector grew by 7.5% year on year in the third quarter, slower than the 12.9% growth in the previous quarter.

The construction sector expanded by 8.8% year on year in the third quarter, faster than the 6.1% growth in the preceding quarter, as both public- and private-sector construction output increased.

Among the services sectors, the wholesale and retail trade, and transportation and storage sectors collectively grew by 8% year on year in the third quarter, extending the 6.9% growth in the previous quarter.

All sectors within the group expanded during the quarter, except for the retail trade sector.

Growth in the wholesale trade sector was led by the machinery, equipment and supplies segment, which saw strong growth in tandem with the robust increase in electronics exports over the same period.

Meanwhile, growth in the transportation and storage sector was supported largely by the water and air transport segments.

On a quarter-on-quarter seasonally adjusted basis, the wholesale and retail trade, and transportation and storage sectors as a whole grew by 2.2%, improving from zero growth in the second quarter.

The group of sectors comprising the information and communications, finance and insurance and professional services sectors expanded by 4.3% year on year in the third quarter, easing from the 5.1% growth in the previous quarter.

All sectors within the group grew during the quarter.

Growth in the information and communications sector was driven by the IT and information services segment, while that in the professional services sector was largely supported by the architectural and engineering, as well as the technical testing and analysis services segments.

Growth in the finance and insurance sector was led by the fund management and banking services segments.

On a quarter-to-quarter seasonally adjusted basis, this group of sectors expanded by 0.4%, moderating from the 2.8% growth in the second quarter.

Growth in the remaining group of services sectors, comprising accommodation and food services, real estate, administrative and support services, and other services industries, came in at 2.1% year on year in the third quarter, extending the 2.4% growth in the preceding quarter.

All sectors within the group expanded during the quarter, except for the food and beverage services sector.

In particular, the accommodation sector grew on the back of an increase in gross lettings in the higher value-added hotel segments.

On a quarter-to-quarter seasonally adjusted basis, the sectors in this group collectively expanded by 0.6%, easing from the 0.8% growth in the second quarter.

Selena Ling, chief economist and head of OCBC group research, said Singapore’s economic growth continued to be driven by AI- and electronics-related activity, trade and transportation services, as well as construction and infrastructure.

She noted that construction growth accelerated sharply in the third quarter, supported by both public- and private-sector activity, while trade and transportation services strengthened on the back of robust regional trade and continued demand for AI-related electronics.

Finance, information and communications, and professional services also continued to expand at a solid pace, but consumer-facing and other domestic services lagged.

“This divergence creates a dual-speed expansion where businesses linked to construction, trade and advanced electronics may continue to benefit from strong demand, while consumer-oriented sectors face a more challenging environment, especially on the domestic cost front and tightening financial conditions,” she said.

Zavier Wong, market analyst at trading platform eToro, said the strong economic growth has yet to translate into tangible benefits for many households. “Most households aren’t seeing that growth in their wallets,” he said.

He noted that much of the growth was driven by electronics exports and construction, while foreign workers accounted for most of the new jobs created in the second quarter. Meanwhile, slightly fewer firms planned to raise wages in July.

At the same time, core inflation rose to 2.1% in July and August, while retail trade and food and beverage services were the only sectors that did not expand.

Wong said the electricity tariff cut in October was likely to provide only temporary relief, as fuel prices have risen since September and tariffs could increase again in January.

“Consumer-facing sectors are likely to stay soft until we see core inflation easing, which MAS (Monetary Authority of Singapore) puts at mid-2027,” he said.

Wong also expects METI to raise its 2026 gross domestic product (GDP) growth forecast in November from the current range of 4.5% to 5.5%.

He noted that growth in the first three quarters had already averaged about 6%, with second-quarter growth revised upwards from 5.9% to 6.2%.

“For the year to stay inside that range, it means the fourth quarter of 2026 would have to stop growing altogether, which is unlikely to happen,” he said.

METI said the preliminary GDP estimates for the third quarter of 2026, including performance by sectors, sources of growth, inflation, employment and productivity, will be released in the Economic Survey of Singapore in November 2026.