Growth momentum likely to be slower than anticipated

DBS cited the tightening measures on foreign labour as a factor that could have suppressed growth momentum.

DBS Group Research noted:

The tightening measures on foreign labour probably have suppressed growth momentum in some of those foreign labour-intensive industries. This is likely to be reflected in the poor performance by the construction sector.

In addition, developers may be slowing down the pace of construction amid a gradual cooling down in the property market.

Despite the upward revision to the headline number, this is undeniably a pullback in growth compared to a 9.4% QoQ saar expansion in the first quarter.

Going forward, the global economy is seen heading into choppy waters, which will have significant implications on the growth outlook for the Singapore economy.

Growth momentum is likely to be slower than previously anticipated and as a result, we have recently revised our growth forecast for the year down to 3.0%, from our previous forecast of 3.5%.