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SINGAPORE - Singapore's economy shrank 0.7 percent in the second quarter, the government said Friday, although the decline was at a slower pace than expected.
The government also revised its overall growth forecast for 2012 to 1.5-2.5 percent from 1.0-3.0 percent, figures first flagged by Prime Minister Lee Hsien Loong in a speech Wednesday.
The April-June contraction was a sharp deterioration from Singapore's 9.5 percent annualised quarter-on-quarter gross domestic product (GDP) growth in January-March, but better than estimates last month for a 1.1 percent fall.
Declines in export-driven sectors such as electronics, which are key elements of Singapore's trade-led economy, were the main factors behind the weak second quarter showing, the Ministry of Trade and Industry said.
The weak global environment, characterised by sluggish consumer spending in advanced economies, is expected to impact Singapore, it said in a statement.
"Given the macroeconomic backdrop, the growth outlook for the Singapore economy remains cautious," the ministry said.
"Externally-oriented sectors, in particular electronics, wholesale and tourism-related services, will be affected by the slowdown in advanced economies.
"Continued uncertainties in the external environment will also weigh down on sentiment-sensitive segments within the finance and insurance sector."
Manufacturing activity shrank 0.5 percent on a quarter-on-quarter annualised basis compared with a 20.8 percent surge in the preceding quarter.
On a year-on-year basis, GDP grew 2.0 percent compared with 1.5 percent in the first quarter.
Singapore last posted negative growth in the fourth quarter of 2011, when GDP shrank an annualised 2.5 percent quarter-on-quarter. But GDP grew 4.9 percent over the whole of last year.
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