Singapore's Ministry of Trade and Industry (MTI) on Thursday announced that it has narrowed the GDP growth forecast for 2016 to 1.0 percent to 2.0 percent, from 1. 0 percent to 3.0 percent.
MTI said the 2016 growth forecast for the Singapore economy is narrowed in line with weaker global growth outlook, and barring the full materialization of downside risks. The ministry noted the global economic outlook has weakened slightly since three months ago in May. The Britain's vote in June to leave the European Union has dampened and also added uncertainties to the global growth outlook.
MTI said most key economies, except for the United States, are expected to see similar or slower growth in the second half of the year as compared to the first half of the year. Domestically, the growth of externally-oriented services sectors, such as finance and insurance and wholesale trade, has slowed. While the manufacturing sector has seen an improvement in performance on account of pockets of strength in segments, but this may not be sustained in the light of sluggish global economic conditions, MTI added.
The ministry expected that growth in the construction sector is also likely to weaken in the coming quarters, with firms in the sector becoming more pessimistic about their business outlook. Tourism-related sectors, such as the accommodation segment, may see a boost from healthy growth in visitor arrivals, supported by the launch of new flights between Singapore and key inbound markets. Growth in "other services industries" and the information and communications sector is also likely to remain resilient, supported by growth in the education, health and social services and IT and information services segments respectively.
MTI on Thursday also released GDP figures for the second quarter of 2016. Singapore economy grew by 2.1 percent on a year-on-year basis in the second quarter, unchanged from the first quarter. While on a quarter-on-quarter seasonally-adjusted annualized basis, the economy expanded by 0.3 percent, slightly faster than the 0.1 percent growth in the preceding quarter.
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