SINGAPORE — Singapore’s economy expanded less than initially estimated in the second quarter and the government revised its growth projections for 2022 lower, flagging risks to the global outlook from the Ukraine war and cost pressures.
Gross domestic product (GDP) grew 4.4% year-on-year in the second quarter, the Ministry of Trade and Industry (MTI) said, slower than the 4.8% growth seen in the government’s advance estimate.
“Downside risks in the global economy remain significant…further escalations in the Russia-Ukraine conflict could worsen global supply disruptions and exacerbate inflationary pressures through higher food and energy prices,” said Gabriel Lim, permanent secretary of MTI at a media briefing.
The Southeast Asian financial hub is often seen as a bellwether for global growth as international trade dwarfs its domestic economy.
On a quarter-on-quarter seasonally adjusted basis, the economy contracted 0.2%, compared with the government’s advance 0% estimate and the 0.8% growth in the first quarter.
“Our current baseline is that GDP will return to a slight positive (quarter-on-quarter) growth in the third and fourth quarter of this year,” said Yong Yik Wei, chief economist of MTI at the media briefing “So in other words we do not expect technical recession.”
Singapore defines two consecutive quarters of quarter-on-quarter economic contraction as technical recession.
The MTI said it would narrow its 2022 GDP growth forecast range to 3% to 4% from 3% to 5%, adding the external demand outlook for the economy has weakened compared with three months ago.
Singapore Prime Minister Lee Hsien Loong this week warned “low inflation levels and interest rates that we have enjoyed in recent decades” were unlikely to return anytime soon.
He added the country of 5.5 million must plan far ahead and transform industry, upgrade skills and raise productivity. (Reporting by Chen Lin in Singapore; Editing by Sam Holmes)