Singapore Economy Slows in Q2 as Central Bank Policy Review Nears

Singapore's economy expanded 5.7% year-on-year in the second quarter, according to flash estimates, topping the 5.5% growth economists had forecast but decelerating from 6.3% in the first quarter. On a quarter-on-quarter seasonally adjusted basis, output rose 1.1%. While the beat on consensus was a modestly supportive headline, analysts said the loss of momentum from the start of the year was the more relevant signal ahead of a closely watched central bank decision. The Monetary Authority of Singapore, which manages policy through the exchange rate rather than interest rates, tightened its stance in April specifically because of the risk that the conflict between the United States and Iran would fuel inflation. That same month it raised its core and headline inflation forecasts for 2026 to a range of 1.5% to 2.5%. The central bank's next review is due before the end of July, though the exact date has not been announced. The trade ministry has projected full-year growth of 2% to 4%, with the pace expected to step down from the strong outturn recorded in 2025.