The Business Times

S'pore needs to up its game on productivity

Published Tue, Jul 15, 2014 · 10:00 PM
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THE unexpected broad-based slump in Singapore's second-quarter economic results, after a fairly strong start to the year, appears to have brought out in force the bears among local economists.

Factory output was flattish at a mere 0.2 per cent rise, while growth in services and construction also slowed markedly, leading to an overall weak 2.1 per cent rise in GDP for the quarter. Against Q1, the economy actually shrank 0.8 per cent, which spells risks of a technical recession if Q3 turns out negative as well. Economists - most, if not all, of whom were caught out by the poor showing - have reacted by cutting their forecasts of Singapore's 2014 GDP growth to below 2013's 3.9 per cent pace, as well as questioning the economy's competitiveness.

Concern about the growth outlook for the year, and more pertinently, about the economy's resilience and competitive edge, is certainly not misplaced. But one might note that the Q2 figures released on Monday are flash estimates based on just two months' data; the full quarter's results incorporating the June data will be unveiled next month. The updated Q2 figures may or may not yield a more reassuring picture of Singapore's growth prospects, but it would be fair to say that one poor quarter does not necessarily spell a trend, or in this case, mark an economy as doomed, as it were.

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