Singapore's economy grew more than expected in the third quarter as a rush for all things linked to artificial intelligence drove up demand for computer chips, according to preliminary data Monday.

The Asian city-state's economic performance is often seen as a barometer of the global environment because of its heavy reliance on international trade.

The trade ministry said a healthy rebound in the key manufacturing sector powered the 4.1 percent year-on-year growth in the three months to September.

Economists had projected growth of less than 4.0 percent.

Manufacturing, which includes computer chips, expanded 7.5 percent year-on-year, bouncing back from a 1.1 percent decline in the previous three months.

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

"We have more and more consumer products being launched incorporating artificial intelligence from mobile phones to cars and vacuum cleaners," he told AFP.

The government in August upgraded its economic growth forecast for this year to 2.0-3.0 percent from 1.0-3.0 percent.

But Song said that "short of another extreme shock in the last two months", he expected growth for the full year to surpass the upper end of that.

In a separate statement, the Monetary Authority of Singapore (MAS), said it will "maintain the prevailing rate of appreciation" of the Singapore dollar as the risks to inflation are "more balanced compared to three months ago".

The city-state uses the exchange rate -- the Singapore dollar is pegged to a basket of currencies of its key trading partners -- to deal with inflation as it imports most 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.