Singapore’s economy expanded in the second quarter, helped by rising manufacturing and construction, even as growth missed economists’ forecasts. The currency fell.

Highlights of GDP report
  • Gross domestic product rose a seasonally-adjusted annualized 0.4 percent from the first quarter, according to preliminary estimates from the Ministry of Trade and Industry on Friday. That compares with a revised contraction of 1.9 percent in the first quarter
  • The median estimate of 15 economists in a Bloomberg survey was for growth of 1.1 percent
  • Compared to the same period last year, GDP rose 2.5 percent in the second quarter, lower than the 2.7 percent median estimate in a Bloomberg survey

Big Picture

Singapore has benefited from a pick-up in global trade since late last year as Chinese demand for electronics and other manufactured goods strengthened. The government is projecting an improvement from last year’s 2 percent expansion.

Still, there are mounting risks. Consumer-focused industries such as retail remain subdued because of a weak labor market, the property market is still in a slump and there are worries about China’s growth outlook as authorities there try to rein in credit.

Analyst Takeaways

  • “There still is some uncertainty as to how the outlook progresses from here,” said Jonathan Cavenagh, head of Asia emerging-market currency strategy at JPMorgan Chase & Co. in Singapore. “Obviously, the external side is doing well, but the Singaporean authorities would probably like to see that the domestic-oriented economy’s doing better, boosting employment growth and driving wage pressures probably before the Monetary Authority of Singapore looks to shift to a tighter policy stance.”
  • “The latest set of figures is broadly consistent with our view that the pace of growth could be tepid going forward,” DBS Group Holdings Ltd. said in a note, citing tighter monetary policies in the U.S. and Europe and a slowdown in China. “We remain guarded against expecting more Singapore dollar appreciation ahead.”
  • “The manufacturing sector has benefited from improved external demand, but growth in the domestically orientated services sector remains soft,” said Sanjay Mathur, chief economist for Asean and India at Australia & New Zealand Banking Group Ltd. in Singapore. “Overall, the data does not suggest any change to the current neutral policy stance of the MAS.”


  • The Singapore dollar fell as much as 0.2 percent to S$1.3766 against the U.S. currency after the data. It has gained more than 5 percent this year.

Other Details

  • Manufacturing rose an annualized 2.4 percent in the second quarter from the previous three months
  • Services, which account for two-thirds of the economy, expanded 0.4 percent
  • Construction gained 4.3 percent
  • Preliminary GDP figures are based on data from the first two months of the quarter and are likely to be revised