News ID: 218212
Published: 0950 GMT July 13, 2018

Singapore second-quarter GDP growth slows as trade tensions cloud outlook

Singapore second-quarter GDP growth slows as trade tensions cloud outlook
PRASIT RODPHAN/SHUTTERSTOCK

Singapore’s economic growth slowed in the second quarter and missed forecasts, preliminary data showed on Friday, as manufacturing activity cooled and worsening US-China trade tensions clouded the outlook for the trade-reliant city-state.

Gross domestic product grew one percent in the second quarter from the previous three months on an annualized 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 percent in a Reuters poll of economists and the downwardly revised 1.5 percent growth in the first quarter, according to Reuters.

“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 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 percent in April-June from a year earlier, versus the median forecast of a four percent expansion in the poll.

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

Manufacturing and exports of electronics were one of Singapore’s main drivers of growth last year. However, a decline in electronics exports for six consecutive months has raised questions about overall demand in the sector.

Earlier this month, the Monetary Authority of Singapore warned risks to the global growth outlook have increased significantly thanks to the intensifying trade row and the rising prospect of a rapid acceleration in inflation.

In May, the MTI had forecast full-year economic growth of 2.5 to 3.5 percent. GDP grew 3.6 percent rise in 2017, the fastest pace in three years.

   
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