Singapore Q2 GDP grows less than forecast, misses recession

SINGAPORE (Reuters) -Singapore’s economy expanded less than initially estimated in the second quarter but avoided a recession, official data showed on Friday.

The city-state was not expecting a technical recession this year, a trade ministry official told a press conference, as gross domestic product (GDP) expanded a seasonally-adjusted 0.1% quarter-on-quarter in April to June, slower than 0.3% growth seen in the government’s advance estimate.

On an annual basis, the economy expanded 0.5%, compared with the advance estimate of 0.7% and first quarter growth of 0.4%, the Ministry of Trade and Industry said.

“Singapore’s external demand outlook for the rest of the year remains weak,” MTI said in a statement, adding that it has narrowed its GDP growth forecast to 0.5% to 1.5% from 0.5% to 2.5% for this year, down from 3.6% in 2022.

Industrial output and exports have fallen for nine straight months, raising the risk of a prolonged downturn.

Inflation had remained elevated in the first half of this year, and some easing was seen in June’s figures, in line with the authorities’ expectations that core prices should moderate further in the second half.

Growth and inflation trends were within expectations, a central bank official said on Friday, adding the Monetary Authority of Singapore’s policy stance was “appropriate”.

MAS left its policy settings unchanged in April, after tightening five times in a row since October 2021, reflecting concerns over the city-state’s growth outlook.

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