Forecasts cut after 1.7% growth in Q2

A lacklustre showing in the manufacturing sector dragged down Singapore's economic growth in the second quarter of this year, which came in at just 1.7 per cent, the slowest since the third quarter of 2012.
A lacklustre showing in the manufacturing sector dragged down Singapore's economic growth in the second quarter of this year, which came in at just 1.7 per cent, the slowest since the third quarter of 2012. PHOTO: REUTERS

A lacklustre showing in the manufacturing sector dragged down economic growth in the second quarter of this year, which came in at just 1.7 per cent, the slowest since the third quarter of 2012.

It was also significantly below the 2.6 per cent tipped by economists and lower than the 2.8 per cent logged in the first three months of the year.

The figure is also much weaker than the 2.7 per cent prediction in a quarterly survey of economists by the Monetary Authority of Singapore released last month.

Advance estimates released yesterday by the Ministry of Trade and Industry showed that the manufacturing sector contracted by 4 per cent over the same quarter last year. This was the sector's third consecutive month of declining output.

The disappointing showing has prompted some economists to downgrade their forecasts for full-year growth and raised the possibility that the central bank may act to ease monetary policy when it next meets in October.

The United Overseas Bank's Mr Francis Tan was among the economists who downgraded their forecasts for the full year. He now expects the economy to grow 2.5 per cent this year, down from an earlier forecast of 2.9 per cent.

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A version of this article appeared in the print edition of The Straits Times on July 15, 2015, with the headline 'Forecasts cut after 1.7% growth in Q2'. Print Edition | Subscribe