Singapore’s economy contracted less than provisional forecast in the April to June quarter, as rising pharmaceutical output countered declines in electronics manufacturing, data released by the government showed on Friday.
GDP shrank at an annualized pace of 0.7% in the second quarter from the previous three months, when it expanded at a revised rate of 9.5%, the Trade Ministry said in a statement today.
That compares with a preliminary estimate of a 1.1% contraction made in July and the median prediction of a 0.5% by economists.
Singapore's economy expanded by 2% from a year earlier, faster than a July estimate of 1.9% and lower than the median forecast of 2.2%.
Manufacturing grew by 4.5% in the last quarter from a year earlier, more than the preliminary projection of 3%. Construction grew at a revised rate of 5.3%, while services grew by a revised pace of 0.8%.
“There continues to be uncertainties and downside risks,” the Trade Ministry said in a statement today. “Global economic conditions are expected to remain subdued in the second half of the year. Given the macroeconomic backdrop, the growth outlook for the Singapore economy remains cautious.”
The Singapore government this week cut its GDP growth forecast for 2012 to 1.5% to 2.5%, from an earlier forecast for an expansion of as much as 3%.
The island’s currency was little changed at S$1.2448 per U.S. dollar as of 9:06 a.m. local time, after rising as much as 0.2% earlier. It has gained more than 4% this year, the second-best performer among the 11 most-traded Asian currencies.
"Singapore’s monetary policy stance is appropriate as it stands now,” central bank Deputy Managing Director Ong Chong Tee told reporters in a briefing today. Consumer- price gains will ease in the second half, he said.
The island isn’t likely to experience a technical recession in the third quarter, Ow Foong Pheng, an official at the Trade Ministry, said at the same briefing.