Blame it on the decline in externally-oriented sectors.
OCBC Investment Research noted:
After expanding 14.5% in 2010, Singapore’s economic growth moderated to 5.4% in 2011 and is now expected to slow to 1.5% in 2012. The pullback in growth momentum was largely due to the decline in externally-oriented sectors, while domestically-oriented activities have remained generally resilient.
Trade-related industries, and the sentiment-driven and offshore lending segments of the financial sector, were the hardest hit by the global slowdown. Manufacturing was not spared, either, and Singapore’s Industrial Production Index contracted by 7.3% QoQ (seasonally adjusted) in 3Q12, following a 0.3% increase in 2Q12 as output slowed across many industries.
On the other hand, domestic activities, especially those anchored by a series of supply-side projects, performed well. Notably, the construction sector grew substantially in 1H12, along with steady expansion in services such as healthcare and education.
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