(Bloomberg) -- Singapore’s economy grew at a slower pace in the second quarter than initially projected as construction slumped.
The export-reliant city state was already facing a high bar for growth this year following a boom in electronics demand in 2017 that fueled global trade. External risks are now building as regional supply chains come under strain because of a U.S.-China trade war, oil prices remain elevated and the dollar strengthens.
The global tensions are “affecting international trade, investments, and business confidence,” Prime Minister Lee Hsien Loong said in a National Day message broadcast Aug. 8. “Singapore’s own growth and prosperity will be affected too.”
Domestically, the government’s property curb announcements last month are set to crimp construction business even as underlying demand, and the labor market, remain steady.
The government maintained its growth forecast for this year of 2.5 percent to 3.5 percent, and said the pace of expansion will moderate in the second half of the year. While growth will continue to be supported by exports and manufacturing, construction will remain lackluster, it said.
Other details from the GDP report:
- Services industry, which makes up about two-thirds of the economy, expanded annualized 0.4 percent in the second quarter from prior three months
- Manufacturing growth eased to 1.8 percent, while construction plunged 15.4 percent
- In a separate release, Enterprise Singapore raised its forecast for non-oil exports this year to 2.5 percent to 3.5 percent
--With assistance from Myungshin Cho.
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