Singapore dodges recession after slight growth in Q2

investing.com:

By Chen Lin

SINGAPORE (Reuters) -Singapore's economy narrowly escaped a recession in the second quarter as global demand weakened and China's slowdown dragged on trade flows, leading some economists to cut their growth forecasts for the year.

The Southeast Asian economy grew a seasonally adjusted 0.3% quarter-on-quarter, following a 0.4% contraction in the first three months, preliminary government data showed on Friday. Four economists with quarterly estimates had forecast growth of 0.3% in a Reuters poll.

«I don't think we are out of the woods completely. It is still a half full half empty kind of situation» OCBC economist Selena Ling said, adding she expects the central bank to make no changes to monetary policy in a scheduled review in October.

She said that while Singapore had escaped a technical recession for now, there was a possibility that final GDP figures for the second quarter could be revised lower due to recent signs of softening growth in China.

China's reopening had fuelled hopes for a sustained recovery in commerce and tourism for the region, especially Singapore's export-dependent economy, but demand has weakened in the wake of higher interest rates and strong inflationary pressures.

On an annual basis, the economy expanded 0.7% in the second quarter, data from the Ministry of Trade and Industry showed. That compared with 0.4% growth in the prior quarter and a 0.6% expansion forecast in a Reuters poll.

Barclays (LON:BARC) economist Brian Tan said it was services activity that led GDP back into expansion, though barely. He cut his full-year forecast to 1.0% from 1.5%.

Tan expects the government to downgrade its forecast because of weak data in the past few months while the central bank maintains