Although the final figure came above the advance estimate of 2.1 percent, growth forecast for this year is narrowed at 2.5 to 3.5 percent from the earlier range at 2 to 4 percent.
The manufacturing sector grew by 1.5 percent year-on-year in the second quarter, a sharp slowdown from the 9.9 percent expansion in the preceding quarter. The deceleration in growth was largely due to a contraction in electronics goods and slower growth in transport engineering output.
The construction sector expanded at a slower pace of 4.4 percent year-on-year in the second quarter, compared to the 6.4 percent growth in the preceding quarter. The slowdown was driven mainly by a fall in private construction output, reflecting weaker private residential building works and a decline in private commercial and industrial building work.
In the second quarter, the wholesale & retail trade grew by 1.7 percent year-on-year, slower than the 3.8 percent expansion in the preceding quarter. This was largely due to weaker growth in the wholesale trade segment, which came on the back of a moderation in non-oil re-exports growth.
The finance & insurance sector expanded by 5.5 percent year-on-year in the second quarter, largely similar to the 5.7 percent growth recorded in the previous quarter. Growth was supported by the core financial intermediary and insurance segments. The business services sector expanded at a slower pace of 2.3 percent year-on-year compared to 3.3 percent in the first quarter. The slowdown in growth was largely due to significantly weaker growth in the rental and leasing segment.
On a quarter-on-quarter seasonally adjusted annualized basis, the economy expanded 0.1 percent, far below the initial estimated 0.8 percent expansion.
For full year of 2014, due to global uncertainties in the US and China as well as possible escalating conflicts in the oil producing regions, Singapore economy is expected to grow at a modest pace. Externally-oriented sectors such as finance & insurance and wholesale trade are likely to support growth in the second half, in tandem with the modest pick-up in the global economy. Domestically-oriented sectors such as business services and information & communications are also expected to remain resilient in the rest of the year. However, growth in some labor-intensive segments such as retail and food services may be weighed down by labor constraint. Taking this factors into account, growth forecast for this year is narrowed to 2.5 to 3.5 percent from the earlier range at 2 to 4 percent.