Singapore GDP fall below expectations with a 0.1% gain in Q2

The Singapore economy expanded by a mere 0.1% from a year ago for the second quarter in a slowdown which is worse than feared, advance estimates from the Ministry of Trade and Industry (MTI) showed on Friday. The weak performance was due to a contraction in the manufacturing sector which evened out the mild growth from the services and construction sectors.

The flat figure marks the slowest quarterly growth for the Republic since the economic downturn in mid-2009, when the economy had shrunk by 1.2%. Economists in a Bloomberg poll had been expecting for a 1% growth for the quarter.

For the first quarter this year, Singapore’s gross domestic product (GDP) came in at a growth of 1.1%.

In May, the MTI had lowered the full-year forecast for Singapore from an earlier growth prediction of 3.5% to a growth of between 1.5% and 2.5%. For last year, the Singapore economy expanded by 3.1%.

On a quarter-on-quarter basis, overall GDP contracted by 3.4%, reversing from the 3.8% growth in the previous quarter.

For the second quarter, the manufacturing sector fell by 3.8% from a year ago, due partly to a high base in the same quarter a year ago which had expanded by 10.6%. The contraction was due to output declines in the electronics and precision engineering clusters, which more than offset the output expansions in the rest of the manufacturing clusters.

The construction sector grew by 2.2% from a year ago, extending from the 2.7% growth in the previous quarter, supported by public sector construction activities.

The services sector, meanwhile, expanded by 1.2% from a year ago, with growth coming from the finance and insurance, other services, and information and communication sectors.

The MTI will be releasing a more comprehensive report on Singapore’s second quarter GDP in August.