Singapore GDP for Second Quarter 2011

Singapore Gross Domestic Product (GDP) grew only 0.5 per cent in the second quarter of 2011 from the same quarter in 2010 (year-on-year basis) based on the advance estimates released on 14 July 2011. This was significantly lower than first quarter’s growth rate of 9.3 per cent.

When compared with the first quarter, the second quarter 2011 contracted 7.8 per cent on seasonally-adjusted annualised basis (quarter-on-quarter basis). This is the first contraction since third quarter of last year.

Both manufacturing sector and services contracted over the first quarter performance, with manufacturing contracted by 22.5 per cent on an annualised basis and services contracted 2.9 per cent. The biomedical manufacturing cluster dragged down the whole manufacturing sector. Even output in the electronics cluster fell too due to weaker global demand for semiconductor chips. Only the construction sector held up well with growth at 13.8 per cent annual rate.

Clearly, Singapore economy had slowed in the second quarter of this year. The Ministry of Trade & Industry (MTI) is reviewing the GDP growth forecast for the whole of this year and will release this review in August. As it stands now, the GDP growth is forecast to be between 5.0 per cent to 7.0 per cent.

Inflation numbers

Inflation, as measured by the consumer price index (CPI), increased by 5.2 per cent in June 2011 compared to corresponding period of last year. This is due mainly to higher costs in housing, transport and food.

CONSUMER PRICE INDEX

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

CPI (2009=100)

101.1

102.3

103.4

104.4

106.3

CPI (Change in %)

0.9

3.1

3.4

4.0

5.2

Source: Singapore Department of Statistics

From the table, one can see that the CPI had been increasing since June last year. Monetary Authority of Singapore (MAS) has increased the inflation forecast for the whole year to between 4 and 5 per cent.

After posting notes: MTI released the latest figures for GDP on 10 August.

“The Singapore economy grew by 0.9 per cent on a year-on-year basis in the second quarter of 2011, compared to the growth of 9.3 per cent in the preceding quarter. On a seasonally-adjusted quarter-on-quarter annualised basis, the economy contracted by 6.5 per cent following the 27.2 per cent expansion in the preceding quarter.” (Source: MTI)

As a result, MTI revised the GDP growth forecast for 2011 to be between 5.0 to 6.0 per cent.

Copyright © 2011, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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