Singapore's Q2 growth likely softened versus Q1

The weakness in the manufacturing sector could drag economic growth.

Singapore's economic growth in the second quarter of this year is expected to have moderated as manufacturing activity eased slightly.

According to Standard Chartered, manufacturing contributed less to Q2 GDP than to Q1 GDP as activity eased over April-May, with output growing by a slower 5.8% y/y over the period, versus 8.5% y/y in Q1.

Meanwhile, easing external demand saw non-oil domestic exports fall 1.0% YoY in April-May versus robust 15.2% growth in Q1. Electronics may have remained the primary growth driver while the broader manufacturing sector likely stayed weak.

"However, our GDP growth tracker suggests upside risk to our Q2 GDP growth forecast. The difference is likely due to our tracker being reliant on more readily available externally-driven activity data, such as industrial production (IP)," Standard Chartered said.

It added, "Domestic activity may have been more subdued. We think Singapore’s growth momentum peaked in Q1, and we expect growth to slow over the coming quarters."