Singapore's economy expanded more than predicted in the third quarter, as a rush for everything related to artificial intelligence drove up demand for computer chips, according to the sources.

Because of its reliance on foreign trade, the Asian city-state's economic performance is sometimes viewed as a proxy for the global environment.

The trade ministry stated a solid resurgence in the main manufacturing sector drove the 4.1 percent year-on-year growth in the three months to September. Economists expected growth of less than 4.0 percent.

Manufacturing, which includes computer chips, increased 7.5 percent year on year, recovering from a 1.1 percent drop in the preceding three months.

Song Seng Wun, Singapore economic advisor at financial services firm CGS International Securities, said,"Tech did all the heavy lifting for the manufacturing sector in the third quarter."

In August, the government raised its economic growth prediction for this year to 2.0-3.0% from 1.0-3.0%.

The city-state utilizes the exchange rate -- the Singapore dollar is fixed to a basket of currencies from its important trading partners -- to combat inflation because it imports the majority of its needs.

"For the rest of 2024, Singapore's growth should be sustained by the ongoing upswing in the electronics and trade cycles as well as the easing in global financial conditions," the MAS said.