Better growth for the second quarter is likely, but there are bumps ahead

Better growth for the second quarter is likely, but there are bumps ahead

SINGAPORE - Tomorrow's report card on the economy is likely to show an improvement from the near flat growth seen in the first quarter but experts advise keeping the champagne on ice.

Businesses and analysts warned that times will be harder over the rest of the year with plenty of headwinds in prospect.

That would signal a sharp change from the first six months.

Economists tipped that the Trade and Industry Ministry report would likely show that the economy grew by at least 2 per cent in the three months to June 30, compared with the same period last year.

This will easily surpass the feeble 0.2 per cent pace in the first three months of the year.

Credit Suisse economist Michael Wan reckoned busier factories and robust stock market activity should boost growth to 2.6 per cent over the same period last year.

But whether this momentum could carry through to the rest of the year depended on how the global economy recovered in the second half, said ANZ economist Daniel Wilson.

He noted that local manufacturers have become more optimistic and have built up an inventory of goods in anticipation of a recovery in the United States.

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