Singapore’s GDP Growth at One-Year Low Amid Growing Trade Risk

Image: Nikada/iStock(Nikada iStock)

Singapore’s economic growth slowed to 3.8% in Q2 from a year ago, according to the advance estimates from the country’s Ministry of Trade and Industry on Friday.

The advance GDP estimates are computed primarily from data in the first two months of a quarter, intended as an early indication of quarterly GDP growth and subject to revision when more comprehensive data become available, according to the MTI.

The Q2 GDP growth rate —compared with 4.3% growth in Q1—rose at a seasonally adjusted, annualized rate of 1% from prior three months.

In May, the ministry narrowed the forecast range for Singapore’s annual growth to 2.5%-3.5%. The ministry reiterated the range earlier this month, expecting the economy to remain a steady expansion path though risks from global trade tensions mount.

While the impact of the US-China trade war has been limited on Singapore by far, a worsening in those relations could have severe implications for the global economy, said Ravi Menon, managing director of the Monetary Authority of Singapore recently.

While the country’s central bank tightened monetary policy for the first time in six years in April, the latest property cooling measures might also limit the upsides to near-term domestic growth.

Manufacturing shrank at an annualized 0.1% from the previous quarter, versus a 21.3% increase in the prior three months. Construction shrank by 14.6% while services expanded 2.5%.