Singapore economy contracts by 0.7% in 2Q12

This translates to a 2% expansion - a sharp pullback in growth compared to a 9.5% expansion in 1Q12.

Here's more from DBS:

Final GDP figures for 2Q12 announced this morning saw the economy contract by 0.7% QoQ saar. That translates into a 2% YoY expansion. This is an upward revision from a 1.1% QoQ saar (1.9% YoY) decline reported in the earlier advance GDP estimates.

Plainly, this is a sharp a pullback in growth compared to a 9.5% QoQ saar expansion in the first quarter. Europe is in recession while the recovery in the US has been sluggish. China’s growth is sub-par. Combined, this impacts Singapore’s prospects. Moreover, the tightening measures on foreign labour probably have suppressed growth momentum in some of those foreign labour-intensive industries.

The global economy is seen heading into choppy waters, likewise for the Singapore economy. Growth momentum is likely to be slower than previously anticipated. We have recently revised our growth forecast for the year down to 3%, from our previous forecast of 3.5%.