SINGAPORE POSTS SLOWER 0.6pc GROWTH IN Q2
Govt sees moderate growth in second half as US spat with trade partners tempers outlook
SINGAPORE’S economy grew slower than initial estimates in the AprilJune period on a quarteron-quarter basis, revised data showed yesterday, as the government flagged a likely moderation in growth in the second half.
The city-state’s Ministry of Trade and Industry (MTI) said retaliatory tariffs between the United States and its major trading partners and interest rate increases from central banks globally had tempered the outlook for the export-dependent economy.
Gross domestic product grew 0.6 per cent in the second quarter from the previous three months on an annualised and seasonally adjusted basis, said the MTI.
That was weaker than the initial estimate of a 1.0 per cent expansion, published last month, and the median forecast in a survey of 1.3 per cent growth.
From a year earlier, the economy expanded 3.9 per cent in the second quarter, marginally above the advance estimate of a 3.8 per cent expansion but lower than the median forecast of 4.1 percent.
The MTI revised its first quarter growth to 2.2 per cent from 1.5 per cent on a quarter-on-quarter basis and its first quarter yearon-year growth to 4.5 per cent from 4.3 per cent.
“The pace of expansion in the Singapore economy is expected to moderate in the second half of this year,” said the MTI, citing increased trade tensions between the US and China and tighter financial conditions globally.
However, it maintained its growth forecast for this year at 2.5 to 3.5 per cent.
“The step down in growth forecasts in the second half of this year was anticipated and has been taken into account in MAS’ baseline,” said Jacqueline Loh, deputy managing director at the Monetary Authority of Singapore (MAS) yesterday.
“Mild inflationary pressures are expected to persist, the current monetary policy stance is appropriate.”
Loh said core inflation is expected in the upper half of the central bank’s one to two per cent forecast range for this year.
The MAS in April tightened its monetary policy for the first time in six years and upgraded its first quarter GDP last month. Despite a cautious outlook, analysts say further tightening in October is not out of the question.