Business

Singapore's economy stalls as manufacturing slumps

  • 14 July 2011
  • From the section Business
factory in Singapore
Image caption As economies in the region try to rein in growth demand for goods has been slowing down

Singapore's economic growth stalled in the second quarter as manufacturing activity in the country plunged.

Growth was 0.5% in the three months to the end of June compared with a year earlier, a sharp decline from 9.3% growth in the previous quarter.

Singapore authorites said the sharp turnaround was led by a drop in demand for semiconductor computer chips.

Manufacturing was down 5.5% in the second quarter compared with a year ago.

Singapore has been struggling to maintain last year's record pace of growth.

Compared to the previous three months, GDP contracted at a rate equivalent to an annual 7.8%.

The weaker-than-expected numbers have led to concerns that the city-state may not be able to meet its growth targets for the year.

"The growth forecast of 5-7% that the government has is looking a bit too positive," said Chua Bin of Bank of America-Merrill Lynch.

The services sector recorded modest growth of 3.3% year-on-year, down from 7.6% in the January-March period, reflecting a slowdown in the distribution and financial sectors, the Trade and Industry Ministry said.