Singapore Q2 GDP grows 1.7% year-on-year, below expectations

THE Singapore economy performed worse than the market had expected in Q2 - expanding 1.7 per cent compared to a year ago - according to advance estimates of gross domestic product (GDP) released by the Ministry of Trade and Industry (MTI) on Tuesday morning.

This was slower than the 2.8 per cent growth seen in Q1.

Private-sector economists polled by Bloomberg prior to the data release had a median growth forecast of 2.4 per cent year-on-year.

On a seasonally-adjusted quarter-on-quarter annualised basis, MTI said overall GDP contracted 4.6 per cent - a reversal from the annualised 4.2 per cent growth in the preceding quarter.

The market had been expecting a quarter-on-quarter contraction of 1.5 per cent.

Growth in the manufacturing sector contracted 4 per cent year-on-year, a worse performance from Q1's 2.7 per cent decline. This was largely due to a fall in output in the biomedical manufacturing and transport engineering clusters.

Services eased to 3 per cent on a year-on-year basis, lower than the 4.2 per cent growth in the previous quarter. This was mostly due to slower expansion in the wholesale & retail trade and business services sectors, as well as a contraction in the transportation & storage sector.

MTI will release updated GDP estimates for the second quarter in August, including performance by sectors, sources of growth, inflation, employment and productivity, in its Economic Survey of Singapore.