Singapore's economy shrank in the second quarter as a global slowdown undermined demand for the city-state's exports, the Trade and Industry Ministry said Friday.
Gross domestic product contracted at a seasonally adjusted, annualized rate of 1.1 percent in the April to June period from the previous quarter, when it expanded 9.4 percent, the ministry said.
Manufacturing, led by electronics and pharmaceuticals, dropped 6 percent in the second quarter, reversing from 21 percent growth in the first quarter, while services grew just 0.4 percent and construction 0.3 percent, it said. "The manufacturing sector, the key driver in the first quarter, is now the main drag," said Irvin Seah, an economist with DBS Bank in Singapore. "Weak external demand on account of the economic turmoil in the eurozone and the fading growth momentum in the U.S. continues to weigh on the growth pace in this sector."
Singapore relies on trade, finance and tourism to fuel one of the richest living standards in the world. The government expects the economy to grow as little as 1 percent this year, down from 4.9 percent growth last year. The economy expanded 1.9 percent in the second quarter from the same period a year earlier, up slightly from 1.4 percent growth in the first quarter.