Singapore's economic expansion moderated in the second quarter, with tensions in the Middle East weighing on the chemical and biomedical manufacturing sectors.

Preliminary estimates released on Tuesday show Singapore's gross domestic product (GDP) grew by 5.7% year-on-year in the second quarter. This growth rate is lower than the revised 6.3% recorded in the first quarter but surpasses the median forecast of 5.3% from a survey of economists.

On a seasonally adjusted quarter-on-quarter basis, the economy expanded by 1.1%, following a revised growth of 1.3% in the preceding quarter. Economists surveyed had anticipated a 1.0% increase.

The Ministry of Trade and Industry stated that the growth was primarily driven by increased output in the electronics and precision engineering sectors, alongside robust demand for semiconductors and semiconductor manufacturing equipment related to artificial intelligence (AI).

The ministry added, however, that the chemical and biomedical manufacturing industry clusters contracted. The chemical cluster, in particular, was impacted by disruptions in feedstock supply stemming from the conflict in the Middle East.