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Singapore's economy shrinks 0.7 percent in 2Q

Published: 10th August 2012 12:09 PM  |   Last Updated: 10th August 2012 12:09 PM   |  A+A-

Singapore's economy shrank in the second quarter as weakening global economic growth hurt demand for the city-state's exports, the Trade and Industry Ministry said Friday.

Gross domestic product contracted at a seasonally adjusted, annualized rate of 0.7 percent in the April to June period from the previous quarter, when it expanded 9.5 percent, the ministry said.

The economy expanded 2 percent in the second quarter from the same period a year earlier, up from 1.5 percent growth in the first quarter, it said.

"Global economic conditions are expected to remain subdued in the second half of the year," the ministry said in a statement. "Externally oriented sectors, in particular electronics, wholesale and tourism-related services, will be affected by the slowdown in advanced economies."

Singapore has one of the richest living standards in the world, fueled by trade, finance and tourism. The ministry said it narrowed its growth forecast for this year to between 1.5 percent and 2.5 percent from between 1 percent and 3 percent. The economy grew 4.9 percent last year and 14.5 percent in 2010.

In the second quarter, manufacturing, led by electronics and pharmaceuticals, dropped a seasonally adjusted, annualized 0.5 percent, down from 21 percent growth in the first quarter, while services slid 0.6 percent and construction grew 0.9 percent.

Friday's GDP numbers were a slight improvement from preliminary results released last month that relied mostly on data from April and May.

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