The Southeast Asian city-state's economy grew 12.3 percent on a seasonally adjusted quarterly basis, according to the Ministry of Trade and Industry's preliminary estimates that are largely based on April and May data.

The second quarter performance exceeded the expectations of economists, who had been expecting annual growth of between 1.8 and 3.5 percent.

There had also been fears of a technical recession if the economy continued to struggle more than expected, after the economy contracted by 5.5 percent on a quarterly basis in the first three months of the year.

One of the main drivers of second-quarter growth was the manufacturing sector, which grew 3.5 percent year-on-year after rising 3.4 percent in the first quarter.

"Strong performance in the transport engineering cluster continued to support growth, as the contraction in biomedical manufacturing eased," the ministry said.

The services sector grew by 4.2 percent, while the construction industry contracted by 1.4 percent.

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