Singapore Q2 GDP jumps revised 20.7 percent

SINGAPORE - Singapore revised slightly higher its economic growth in the second quarter, but warned U.S. consumption must pick up to sustain the recovery.

Gross domestic product grew an annualized, seasonally adjusted 20.7 percent in second quarter, the Trade and Industry Ministry said in a statement Tuesday. The ministry last month initially reported a 20.4 percent expansion.

Manufacturing surged 49.5 percent, construction jumped 32.7 percent, and financial services rose 22.8 percent from the previous quarter, the ministry said.

"This improvement was largely driven by the spike in output from the volatile biomedical manufacturing cluster and inventory re-stocking," the ministry said. "Financial services was boosted by sentiment-sensitive segments such as stock market activities."

"It is uncertain if these can be sustained into the second half."

Before the April to June period, the economy contracted the previous four quarters as the global recession undermined demand for Singapore's exports. The government expects the economy to fall up to 6 percent this year.

GDP shrank 3.5 percent in the second quarter from a year earlier, better than the previous estimate of a 3.7 percent contraction, the ministry said.

Non-oil exports, which account for about 60 percent of GDP, rose a seasonally adjusted 7.6 percent in the second quarter from the first quarter, while falling 14 percent from a year earlier, the ministry said. The government expects non-oil exports to contract up to 12 percent this year.

An economic recovery in the second half and next year will likely be muted unless U.S. consumer demand grows more than expected, Ravi Menon, deputy trade ministry, said at a news conference.

"The subdued and weak recovery that we see taking place in the second half of this year is likely to continue to next year," he said. "That's not a bad outcome if we continue to avoid financial slippages and double dip recession scenarios."