Singapore GDP shrinks 1.1% in Q2

Article in The Business Times (Singapore) indicating that the economy of Singapore contracted. I rate the quality of the numbers and estimates of Singapore (both for economic growth and inflation) rather high, much higher than those of Malaysia (especially the Malaysian inflation number looks much too low).

With Malaysia being also a rather open economy, and with bad news from Europe, US and China (see for instance this Bloomberg link), this bodes not well for the near term.

GDP shrinks 1.1% in Q2: advance estimates

Singapore faces risk of technical recession in the third quarter: economists

ByEmilyn Yap

Quarter on quarter, Singapore's economic contraction in Q2 was largely due to a 6 per cent sequential drop in the manufacturing sector. A decline in biomedical manufacturing output more than offset gains in the transport engineering cluster, MTI said.

The Republic's economy performed worse than expected in both the second and first quarters, igniting talk of a looming technical recession in the third quarter.

Advance estimates from the Ministry of Trade and Industry (MTI) yesterday showed GDP shrinking 1.1 per cent in Q2 from the previous quarter on a seasonally adjusted annualised basis, as manufacturing faltered. This was a sharp reversal from Q1's 9.4 per cent expansion, which MTI lowered from the previously announced 10 per cent.

Several economists have trimmed their full-year growth forecasts, and some have raised the odds of a looser monetary policy in October.

"The negative Q2 GDP print underscores the downside risks to the growth outlook, and could spur more worries of a technical recession," said Nomura economist Euben Paracuelles.