Out of the blue, Singapore, which is one of Asia’s most successful economies yesterday reported a sharp slowdown in economic growth after GDP dipped into the red in the three months to June 30, thanks to a surprise slide in the island state’s large manufacturing sector.
The country’s Ministry of Trade and Industry yesterday revealed in a preliminary report that the country’s GDP was up 2.1% in the three months to June from the same quarter of 2013, sharply slower than the 4.7% growth rate seen in the March quarter of this year.
Thanks to an unexpected slide in manufacturing activity, GDP fell 0.8% in the quarter ending June 30 from the March quarter’s 1.6% quarter on quarter growth.
The slowdown took the market and analysts by surprise with the consensus forecast for a rise of 2.2% in the quarter from the three months to March.
Singapore GDP shrinks
Gross domestic product for the three months to June 30 fell 0.8% on a seasonally adjusted and annualised basis compared with the previous quarter, according to advance estimates by the Ministry of Trade and Industry on Monday. This compared with a revised 1.6% increase in the first quarter.
Manufacturing output rose by only 0.2% year on year in the second quarter, compared with a 9.9% expansion in the March quarter.
Services output grew 2.8% on year in the three-month period, while the construction sector expanded 5%.
On a seasonally adjusted and annualised basis, the services sector grew 5.2% in the second quarter from the first quarter, but manufacturing contracted 19.4%.
Construction expanded 2.6%, up from the 0.5% growth rate seen in the first quarter.
The fall in manufacturing "was largely due to a contraction in electronics output and slower growth in transport engineering output", according to the Trade department’s report.
