Singapore’s economy grew by 1.8% on a year-on-year basis in the second quarter, slower than the 2.8% growth in the previous quarter, announced the Ministry of Trade and Industry this morning.
MTI has also narrowed the GDP growth forecast for 2015 to between 2.0 and 2.5%, from 2.0 to 4.0%.
The manufacturing sector contracted by 4.9% year-on-year, extending the 2.4% decline in the previous quarter.
The sector was primarily weighed down by declines in the output of the biomedical manufacturing and transport engineering clusters, says the ministry.
On a quarter-on-quarter seasonally-adjusted annualised basis, the sector contracted by 18.3%, reversing from the 1.7% growth in the first quarter.
However, the construction sector expanded at a faster pace of 2.5% year-on-year compared to the 1.1% in the previous quarter.
Growth was supported by a pick-up in public sector construction works. On a quarter-on-quarter basis, the sector grew at an annualised rate of 2.9%, slower than the 4.2% growth in the preceding quarter.
The wholesale & retail trade sector grew by 5.0% year-on-year, slightly slower than the 5.3% expansion in the previous quarter.
Growth was driven by both the wholesale trade and retail trade segments, with the latter being supported in turn by robust motor vehicle sales.
On a quarter-on-quarter seasonally-adjusted annualised basis, the sector shrank by 1.7%, a reversal from the 20.5% growth in the preceding quarter.
Meanwhile, the finance & insurance sector posted growth of 7.1% year-on-year, extending the 7.8% growth in the previous quarter.
Growth was largely underpinned by the fund management segment.
On a quarter-on-quarter seasonally-adjusted annualised basis, the sector grew by 2.5%, after contracting by 12.8% in the preceding quarter.
Outlook
The global economy performed weaker than expected in the first half of 2015, says the ministry.
For the rest of the year, MTI expects global growth to pick up gradually, although the pace of growth is likely to be uneven across economies.
In particular, the advanced economies are expected to see a gradual pick-up in growth, while the growth outlook of regional economies has generally softened.
For the rest of 2015, the US economy is projected to grow at a modest pace, supported by private domestic demand.
In Asia, China’s growth is projected to ease, weighed down by the on-going property market correction and excess capacity in the heavy industries.
Meanwhile, growth in key ASEAN economies is likely to be weighed down by weaker demand from China as well as softening domestic demand.
On a quarter-on-quarter seasonally-adjusted annualised basis, the economy contracted by 4.0%, a reversal from the 4.1% growth in the preceding quarter.
In tandem with the expected gradual pick-up in the global economy, externally-oriented sectors such as finance & insurance and wholesale trade are likely to support growth in the Singapore economy in the second half of the year, says the ministry.
However, sector-specific factors could continue to weigh on the growth of some externally-oriented sectors. For instance, it says sustained low oil prices could continue to dampen growth in the marine & offshore segment.
“On the other hand, domestically-oriented sectors such as the business services and information & communications sectors are expected to see modest growth. With the labour market expected to remain tight, growth in some labour-intensive sectors such as food services may be weighed down by labour constraints,” it adds.
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MTI has also narrowed the GDP growth forecast for 2015 to between 2.0 and 2.5%, from 2.0 to 4.0%.
The manufacturing sector contracted by 4.9% year-on-year, extending the 2.4% decline in the previous quarter.
The sector was primarily weighed down by declines in the output of the biomedical manufacturing and transport engineering clusters, says the ministry.
On a quarter-on-quarter seasonally-adjusted annualised basis, the sector contracted by 18.3%, reversing from the 1.7% growth in the first quarter.
However, the construction sector expanded at a faster pace of 2.5% year-on-year compared to the 1.1% in the previous quarter.
Growth was supported by a pick-up in public sector construction works. On a quarter-on-quarter basis, the sector grew at an annualised rate of 2.9%, slower than the 4.2% growth in the preceding quarter.
The wholesale & retail trade sector grew by 5.0% year-on-year, slightly slower than the 5.3% expansion in the previous quarter.
Growth was driven by both the wholesale trade and retail trade segments, with the latter being supported in turn by robust motor vehicle sales.
On a quarter-on-quarter seasonally-adjusted annualised basis, the sector shrank by 1.7%, a reversal from the 20.5% growth in the preceding quarter.
Meanwhile, the finance & insurance sector posted growth of 7.1% year-on-year, extending the 7.8% growth in the previous quarter.
Growth was largely underpinned by the fund management segment.
On a quarter-on-quarter seasonally-adjusted annualised basis, the sector grew by 2.5%, after contracting by 12.8% in the preceding quarter.
Outlook
The global economy performed weaker than expected in the first half of 2015, says the ministry.
For the rest of the year, MTI expects global growth to pick up gradually, although the pace of growth is likely to be uneven across economies.
In particular, the advanced economies are expected to see a gradual pick-up in growth, while the growth outlook of regional economies has generally softened.
For the rest of 2015, the US economy is projected to grow at a modest pace, supported by private domestic demand.
In Asia, China’s growth is projected to ease, weighed down by the on-going property market correction and excess capacity in the heavy industries.
Meanwhile, growth in key ASEAN economies is likely to be weighed down by weaker demand from China as well as softening domestic demand.
On a quarter-on-quarter seasonally-adjusted annualised basis, the economy contracted by 4.0%, a reversal from the 4.1% growth in the preceding quarter.
In tandem with the expected gradual pick-up in the global economy, externally-oriented sectors such as finance & insurance and wholesale trade are likely to support growth in the Singapore economy in the second half of the year, says the ministry.
However, sector-specific factors could continue to weigh on the growth of some externally-oriented sectors. For instance, it says sustained low oil prices could continue to dampen growth in the marine & offshore segment.
“On the other hand, domestically-oriented sectors such as the business services and information & communications sectors are expected to see modest growth. With the labour market expected to remain tight, growth in some labour-intensive sectors such as food services may be weighed down by labour constraints,” it adds.
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