Singapore's Q2 GDP down 4.2% on year, hit by Iraq war and SARS outbreak

Singapore’s economic growth turned sharply negative in the second quarter of 2003, falling to – 4.2 percent from positive growth of 1.7 percent in the first quarter.

Uncertainties associated with the war in Iraq and the SARS outbreak caused the growth momentum (on an annualised quarter-on-quarter basis) to dip sharply by 11 percent after an increase of 1.4 percent in the previous quarter.

Total demand fell by 1.6 percent in 2Q03, after growing by 5.3 percent a quarter earlier.

Growth in external demand slowed to 4.8 percent, due to a smaller gain in goods exports and a decline in services exports.

The expansion in goods exports reflected continued growth in shipments of chemicals and semiconductors, while services exports fell largely due to the SARS-induced drop in the export of travel services.

Meanwhile, uncertainties about the global economy saw domestic private investments fall for the fourth consecutive quarter, by 11 percent.

In addition, private consumption expenditure (PCE) rose by a marginal 0.2 percent in the quarter, on account of lower spending at restaurants and hotels, overseas travel and financial services.

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