Singapore's Q2 Growth Slows To 2.1% : Government

AFP – 12 August 2008  

Singapore's economic growth slowed to an annual 2.1 percent in the second quarter, the government announced on Monday, just days after cutting the full-year growth target to 4.0-5.0 percent.

The quarterly performance was sharply down from the 6.9 percent rise recorded in the first quarter and brought real GDP expansion in the first half of 2008 to 4.5 percent, the ministry of trade and industry said (MTI).

On an annualised, quarter-on-quarter basis, GDP contracted 6.0 percent in the second quarter, better than analysts' expectations of a decline of 6.8 percent, according to a Dow Jones Newswires poll.

MTI also said the full-year growth target for 2008 has been cut to 4.0-5.0 percent from 4.0-6.0 percent, a downward revision first announced by Prime Minister Lee Hsien Loong in his National Day message on Friday.

It said the revised growth target "is consistent with the moderation in economic growth seen in the second quarter.

"The outlook for the second half of 2008 is not expected to improve much with the major economies generally seeing a slowdown that will in turn affect exports from Asia including Singapore, MTI said.

"GDP growth in the second half is likely to be broadly similar to the first half," it said.

"Weaker demand in the major economies, coupled with the need to contain inflationary pressures, will dampen growth in the fast growing Asian economies.

"Last quarter's weak performance was due to contraction in the biomedical sector and sluggish growth in the electronics industry, both lynchpins of Singapore's trade-led economy, MTI said.

"The lower growth in the second quarter was mainly the result of a sharp contraction in biomedical manufacturing value-added," it said, adding that "stagnant growth in the electronics industry also contributed to the slowdown in GDP growth.

"The manufacturing sector, which includes biomedical and electronics, shrank an annual 5.2 percent in the second quarter after growing 12.7 percent in the previous quarter.

Construction grew 17.4 percent, faster than the 16.9 percent growth in the first quarter, while services-producing industries expanded 7.0 percent compared with 7.7 percent in the March quarter.