SINGAPORE - Singapore's economy grew an annualised and seasonally adjusted 15.2 per cent in the second quarter from the first, far outstripping expectations as manufacturing staged a strong rebound, the government's advanced estimates showed on Friday.
The manufacturing sector expanded by an annualised and seasonally adjusted 37.6 per cent, turning around from a decline of 12.7 per cent in the first quarter. Services and construction both gained 9.0 per cent during the quarter.
The quarter-on-quarter expansion in GDP was the strongest since the first quarter of 2011, and the sizzling pace was almost double the 8.3 per cent forecast by analysts.
From a year ago, Singapore's gross domestic product (GDP) rose 3.7 per cent, improving from the first quarter's 0.2 per cent year-on-year expansion and beating the median forecast for a 2.0 per cent expansion.
"The sharp rebound (in GDP) largely reflected the strong growth in the output of the biomedical manufacturing and electronics clusters," the Ministry of Trade and Industry said in a statement.
Singapore, whose trade is three times the size of its gross domestic product (GDP), has seen a sharp drop in economic growth in the past two years, hurt by weak demand for its exports as well as a global slowdown in investment banking activity.
While the manufacturing sector has turned the corner, economists remain cautious about the outlook, citing the slowdown in China and continued weakness in the European Union which is Singapore's largest export market.
"The recovery in manufacturing came earlier than expected. We did see a pickup in pharma and some stabilization in electronics, but we had actually penciled in a very marginal contraction in manufacturing in the second quarter because the June PMI for the region and globally are still all over the place," said Overseas-Chinese Banking Corp head of treasury research Selena Ling.
"There is still bit of a question mark and we may see some revisions when the final numbers for Q2 come out," she added.
China earlier this week warned of a "grim" outlook for trade after a surprise fall in June exports. Shipments to the United States, China's biggest export market, fell 5.4 per cent in June from a year ago, while exports to the European Union dropped 8.3 per cent.
Singapore's advance GDP estimates are computed largely from data in the first two months of the quarter. Detailed GDP estimates will be published next month.