Singapore: Subdued second quarter growth revised somewhat higher
August 10, 2011
According to revised figures released on 10 August, in the second quarter GDP expanded 0.9% over the same period last year. The reading was revised up from the advanced estimate of 0.5% growth released on 14 July. Despite the upward revision, the figure represents a significant slowdown compared to the 9.3% expansion observed in the previous quarter. The deterioration was entirely driven by the external sector, in part reflecting disruptions to the supply chain stemming from the Japanese disaster. While exports slowed from an 8.4% expansion in the first quarter to a 1.8% increase, imports moderated less markedly from growing 5.8% in the first quarter to a 2.9% expansion. As a result, the contribution of the external sector to overall growth swung from plus 7.6 percentage points in the first quarter to minus 1.4 percentage points. On the domestic front, private consumption accelerated to a 6.6% expansion (Q1: +6.1% year-on-year) and government consumption increased 5.4% (Q1: -2.6% yoy). Furthermore, gross fixed investment surged, swinging from a 7.8% contraction in the previous quarter to a 10.0% increase. At the sector level, the deterioration was broad-based, as growth in all main sectors ? construction, manufacturing, and services ? slowed compared to the first quarter. However, the moderation was mainly driven by a contraction in the manufacturing sector, which swung from a 16.5% increase in the first quarter to a 5.9% decline. Moreover, the services sector, which accounts for nearly two thirds of GDP, slowed from a 7.6% increase in the first quarter to a 3.9% expansion in the second quarter. A quarter-on-quarter analysis corroborates the significant deterioration, as the economy recorded an outright contraction of 6.5% over the first quarter in seasonally-adjusted annualised terms. The print contrasted the robust 27.2% expansion recorded in the previous quarter. Taking into account the subdued second quarter reading and a deceleration in the global economy, the government cut its growth forecast range for this year to between 5% and 6%, down from the previous range of 5% to 7%.