SINGAPORE, REUTERS-- Singapore's economy may have grown slightly more than previously estimated in the second quarter due to strength in manufacturing, but questions remain about whether the pick-up will broaden to other sectors in the second half.
The median forecast in a Reuters survey of 10 economists predicted that gross domestic product in the April-June quarter expanded by 0.5 percent from the previous three months on an annualised and seasonally adjusted basis.
That would be marginally higher than the government's advance estimate of 0.4 percent growth, which was released on July 14. The economy contracted in the first quarter.
Some economists say the chances of an upward revision have increased after June industrial production exceeded expectations. The revised data will be released on Friday at 8 a.m. local time.
Singapore and other trade-reliant Asian economies have gained a boost this year from an improvement in global demand, particularly for electronics products and components such as semiconductors.
Growth in other parts of the city-state's economy has been uneven, however, and the revised data is seen as unlikely to drastically alter that picture.
Retail sales have been largely tepid this year while construction has been sluggish, weighing on the services sector.
"Growth is quite narrowly based. We're talking about semiconductors, the precision engineering segment," said Brian Tan, an economist at Nomura. "The rest of the economy really looks quite anaemic."
On an annual basis, GDP growth for the second quarter is expected to be revised to 2.6 percent year-on-year, again up only marginally from the advance estimate of 2.5 percent.
With Singapore's economy not firing on all cylinders, and lingering external risks such as a possible flare-up in trade protectionism, most economists expect the central bank to keep its exchange-rate based monetary policy unchanged at its next policy decision due in October.
"They (MAS) can afford to wait, even if the medium-term bias is to revert to a more hawkish stance," said Selena Ling, head of treasury research and strategy for OCBC Bank.
The MAS may take time to assess how financial markets react after the U.S. Federal Reserve announces, possibly in September, its plans for reducing its balance sheet, and will also be monitoring risks such as signs of escalating U.S.-China trade tensions, Ling said.
The MAS kept policy unchanged at its last policy decision in April, saying a "neutral" stance is appropriate for an extended period.
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