Singapore’s economy stalled in the second quarter as manufacturing slumped amid weaker global demand for the city-state’s exports.
GDP grew 0.5 percent in the April-to-June period from a year earlier, the Singaporean Trade and Industry Ministry said yesterday.
Industrial production slid 5.5 percent ,while services expanded 3.3 percent, the ministry said.
Singapore enjoyed record economic growth last year as the global economy recovered from recession and two new casino-resorts boosted tourist arrivals. GDP surged 14.5 percent last year, and the government in May said it expected growth of up to 7 percent this year after a 9.3 percent expansion in the first quarter.
However, the expansion petered out last quarter as production of electronics and pharmaceuticals dropped, the ministry said.
The economy contracted a seasonally adjusted and annualized 7.8 percent from the first quarter as manufacturing plunged 23 percent.
“The Singapore economy’s roller-coaster ride continues with a vengeance,” said Robert Prior-Wandesforde, an economist with Credit Suisse in Singapore. “The fundamentals point to a soft patch rather than anything more serious.”
Higher oil prices, a struggling Japanese economy in the aftermath of a devastating earthquake and tsunami and Europe’s ongoing debt crisis all helped dampen global economic growth in the second quarter.
China said on Wednesday that its economy grew 9.5 percent in the second quarter, slowing slightly from 9.7 percent in the previous quarter, while South Korea’s central bank yesterday left its key interest rate unchanged at 3.25 percent amid growing eurozone debt problems.
Singapore has sought in recent years to develop its tourism industry in a bid to become less dependent on manufacturing.
Along with casinos built by Las Vegas Sands and Malaysia’s Genting, a slew of flashy new malls have sprung up in the last two years on the island’s Orchard Road shopping strip, bringing in visitors from countries such as Indonesia, Malaysia and China.
The second-quarter economic data is preliminary and is compiled mostly from April and May statistics, said the ministry, which is scheduled to release complete figures next month.
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