Singapore’s economy contracted by 0.7 percent on-quarter in the second quarter of 2012, a reversal from a growth of 9.5 percent in the previous quarter.
On a year-on-year basis, the economy expanded by 2.0 percent, compared to 1.5 percent in the preceding quarter.
In a statement on Friday, the Ministry of Trade and Industry (MTI) says it will narrow the GDP growth forecast for 2012 from 1.0 percent to 3.0 percent, to 1.5 percent to 2.5 percent.
Similarly in his National Day message on Wednesday, prime minister Lee Hsien Loong had said Singapore’s economy grew 1.7 percent in the first half of this year. He also said the economy is on track for 1.5 percent to 2.5 percent growth for 2012.
MTI says the pull-back in quarter-on-quarter growth was largely due to the decline in externally-oriented sectors such as electronics manufacturing, as well as wholesale trade and tourism-related services.
The manufacturing sector contracted marginally by 0.5 percent, following the 20.8 percent expansion in the preceding quarter.
On a quarter-to-quarter basis, the construction sector decelerated to 0.9 percent from 27.9 percent in the preceding quarter, due to a slowdown in construction activities.
Elsewhere, the wholesale and retail sector contracted by 0.4 percent on-quarter, mainly due to the deterioration in the wholesale segment.
The transportation and storage sector grew by a robust 7.2 percent on a quarter-on-quarter basis, while growth in the finance and insurance sector was at a modest pace of 2.1 percent.
Visitor arrivals also moderated recently. Growth of accommodation and food services declined by 5.8 percent on-quarter.
Singapore’s growth outlook remains cautious in the second half of the year.
MTI says it expects global economic conditions to remain subdued, as consumer spending in advanced countries will be dampened by weak labour market conditions.