Singapore slashes GDP growth forecast to 1-2% as economy expands 2.1% in Q2

Amid Brexit-related vagaries and China’s rising corporate credit.

The Ministry of Trade and Industry (MTI) has slashed its 2016 GDP growth to 1-2%, noting that the global economic outlook has wavered since three months ago in May. This is a drop from MTI’s previous growth projection of 1-3%.

According to an announcement by the MTI, the projection takes into account uncertainties catalysed by Brexit. It also takes into consideration the potential for a boom in debt defaults as China's climbing corporate credit levels.

MTI further reported that Singapore's economy grew by 2.1% YoY in Q2, unchanged from the first quarter. On a QoQ seasonally-adjusted annualised basis, the economy expanded by 0.3%, slightly faster than Q1's 0.3% growth.

Manufacturing growth tapered significantly to 1% QoQ, compared to 18.7% in Q1, while construction growth accelerated to 5.3% QoQ from Q1's 1.4%.

Wholesale and retail trade also expanded by 3.6% QoQ, a turnaround from the 6.1% QoQ slump in Q1. Transportation and storage growth rose by 6.7% QoQ, speeding up from the 4.4% QoQ growth in the preceding quarter. Information and communications growth climbed 1.2% QoQ, reversing its Q1 3.6% QoQ pullback.

Finance and insurance shriveled by 11.2%, following the 14.2% QoQ plunge in Q1. Accommodation and food services also shrank by 4% QoQ, in contrast to its 1.2% QoQ expansion in Q1. Businesses services growth contracted 3.6% QoQ, extending Q1's 0.9% slip.

Meanwhile, growth in the "other service industries" expanded 4.9% QoQ, rebounding from its 3% QoQ tumble in Q1. 

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