Singapore Q2 GDP grew by 3.8 per cent year-on-year, but misses expectations

SINGAPORE — Singapore's economic growth slowed in the second quarter and missed forecasts, preliminary data showed on Friday (July 13), as manufacturing activity cooled and worsening US-China trade tensions clouded the outlook for the Republic.

Gross domestic product grew 1.0 percent in the second quarter from the previous three months on an annualised and seasonally adjusted basis, the Ministry of Trade and Industry said on Friday in a statement.

That compares with a median forecast of 1.2 per cent in a Reuters poll of economists and the downwardly revised 1.5 per cent growth in the first quarter.

"Overall, the sense is that momentum is going to continue to slow, some of it from the high base last year, some of it because electronics seems to be tapering off a little bit," said Ms Selena Ling, OCBC Bank's head of treasury research and strategy.

"Downside risks from the US-Sino trade tensions are definitely there," she said.

The economy expanded 3.8 per cent in April-June from a year earlier, versus the median forecast of a 4.0 per cent expansion in the poll.

The economy decelerated from the downwardly revised 4.3 per cent growth posted for January-March.

Table: Ministry of Trade and Industry

The manufacturing sector grew slower in the second quarter — by 8.6 per cent on a year-on-year basis — compared to the 9.7 per cent growth in the previous quarter, said the MTI.

The sector shrank marginally by 0.1 per cent, a reversal from the 21.3 per cent growth in the preceding quarter, based on a quarter-on-quarter seasonally-adjusted annualised basis.

Meanwhile, the construction sector contracted by 4.4 per cent on a year-on-year basis in the second quarter, extending the 5.2 per cent decline in the previous quarter.

On a quarter-on-quarter seasonally-adjusted annualised basis, the construction sector shrank by 14.6 per cent, reversing the 0.9 per cent growth in the preceding quarter, the MTI added.

The services producing industries expanded by 3.4 per cent on a year-on-year basis in the second quarter, easing from the 4.0 per cent growth in the previous quarter.

On a quarter-on-quarter seasonally-adjusted annualised basis, the services producing industries grew by 2.5 per cent, a turnaround from the contraction of 1.4 per cent in the preceding quarter. AGENCIES