Singapore Wednesday cut forecasts for economy, exports

SINGAPORE: The Singapore economy grew 0.9% on a year-on-year basis in the second quarter of 2011 compared with a 9.3% growth recorded in the preceding quarter.

On a seasonally-adjusted quarter-on-quarter annualised basis, the economy contracted by 6.5%, a contrast from 27.2% growth recorded in the preceding quarter.

In a statement today, the Ministry of Trade and Industry also cut 2011's growth forecast to between 5% and 6%, from its earlier forecast of between 5% and 7%.

On a year-on-year basis, the manufacturing sector contracted 5.9% in the second quarter of 2011, while on a sequential basis, the sector contracted by an annualised rate of 23.7%.

This was largely due to a decline in biomedical manufacturing output, as some companies switched to producing a different value mix of active pharmaceutical ingredients.

Electronics output also declined, as global demand for semiconductor chips eased.

The construction sector grew by 1.5%, on a year-on-year basis, sustained by increases in public sector construction activities.

On a sequential basis, the sector expanded by an annualised rate of 13.4%.

The wholesale & retail trade sector experienced flat growth on a year-on-year basis, and an annualised sequential decline of 8.4%.

This largely reflected the slowdown in global trade flows during the quarter. The transport & storage sector grew by 4.1%, on account of buoyant air travel demand.

The business services sector registered a weak growth of 2.2% on a year-on-year basis, mainly due to a moderation in the real estate services segment.

Touching on the outlook for 2011, the ministry expressed concern that a double-dip recession had emerged in the United States and that the recent downgrade of US sovereign debts rating has led to financial market volatility and increased uncertainties.

The ministry cautioned that Singapore's economic growth could be lower-than-expected should these situations worsen.

AP reported the ministry also reduced its growth forecast for non-oil domestic exports to between 6 percent and 7 percent from an earlier prediction of between 8 percent and 10 percent. - BERNAMA/AP