Second-Quarter Growth Falls To 5-Year Low

Source : The Straits Times, July 10, 2008

Economists cut full-year forecasts after dismal 1.9% April-June figure

ECONOMISTS have pared their forecasts for the year after growth in the second quarter slumped to the lowest level in five years.

Estimates have been reined in from the 5.5 per cent or more tipped early this year to as low as 3.5 per cent as analysts come to grips with yesterday's shock numbers.

The Singaporean economy grew at just 1.9 per cent year-on-year in the second quarter, well down on first-quarter growth of 6.9 per cent, according to flash estimates from the Trade and Industry Ministry (MTI). -- PHOTO: URA

The economy grew at just 1.9 per cent year-on-year in the second quarter, well down on first-quarter growth of 6.9 per cent, according to flash estimates from the Trade and Industry Ministry (MTI).

Its estimates are culled largely from data in the first two months of the April-June quarter and serve as an early indicator of growth.

The downbeat estimates stunned many economists, who responded by lowering their forecasts for this year and even 2009.

United Overseas Bank has trimmed its full-year forecast to 4.7 per cent and 5 per cent in 2009.

It cited 'weaker-than-expected second quarter figures, the vulnerability of Singapore's open economy to an external slowdown and the impact of a strong Singdollar on exports'.

CIMB-GK economist Song Seng Wun has cut his 2008 growth forecast from 5.7 per cent to 4.6 per cent.

Hong Kong-based Sun Mingchun of Lehman Brothers said: 'We expect GDP growth to slow sharply to 4.3 per cent in 2008 from 7.7 per cent in 2007.'

Standard Chartered's Alvin Liew, who had earlier predicted growth of 4.5 per cent, has slashed his forecast to just 3.5 per cent.

There may not be much help coming from the region either, with economists expecting other Asian countries to report plunging second quarter figures soon.

Read the full story in Friday's edition of The Straits Times