SINGAPORE - Singapore cut the top end of its 2016 growth forecast on Thursday (Aug 11) after the economy expanded less than previously estimated in the second quarter, underscoring a weakening global outlook.
The economy is now expected to grow by 1 to 2 per cent this year, from 1 to 3 per cent, the Ministry of Trade and Industry said. Here's how economists reacted:
OCBC economist Selena Ling mantains her forecast of 1.8 per cent full-year growth
"We think the slowdown in the second half could be limited to around 1.5 per cent growth year-on-year from 2.1 per cent in the first half, even though there may be some downside risks in the third quarter given the brunt of the Brexit referendum could be felt in the financial markets and consumer confidence.
"The 1-2 per cent official growth forecast revision is slightly more bearish than what we anticipated given first half growth is already 2.1 per cent year-on-year and growth in the second half would have to potentially slip to zero for the full year to hit the lower 1 per cent floor of the revised official forecast range."
Mizuho economist Vishnu Varathan is also sticking by his full-year growth forecast of 1.8 per cent
"Growth in the second half is expected to decelerate below 2 per cent on heightened (global) uncertainties.
"The 3 per cent top-end of the previous forecast (would have required) second half growth to accelerate significantly to 4 per cent. Thus, a narrower growth range is not surprising."
DBS economist Irvin Seah expects full-year growth of just 1.5 per cent
"A sub-par performance in the services sector is the key concern. The service sector has now contracted for two consecutive quarters and is technically now in recession. (The service sector) accounts for some two-thirds of gross domestic output and employment.
"Overall, such subdued growth momentum underscores the challenging external environment. Companies and consumers will remain cautious."