SINGAPORE, Aug 11 — The Republic has lowered its forecast for Gross Domestic Product (GDP) this year, expecting slower growth in the second half of the year.

The GDP forecast for 2016 has been narrowed to 1 per cent to 2 per cent, from the earlier 1 per cent to 3 per cent, said the Ministry of Trade and Industry (MTI) today.

Final data from MTI showed the second quarter growth at 2.1 per cent on a year-on-year basis, unchanged from the first quarter. On a quarter-on-quarter basis, growth was at 0.3 per cent, compared to a 0.1 per cent growth in the preceding quarter. 

The readings are lower than than the 2.2 per cent year-on-year and the 0.8 per cent quarter-on-quarter advance estimates figures released from the MTI last month.

"The global economic outlook has weakened slightly since the three months ago in May. 

"The UK’s vote in June to leave the European Union has dampened and also added uncertainties in the global growth outlook. 

"In line with this, most key economies, except for the US, are expected to see similar or slower growth in the second half of the year as compared to the first half of the year,” MTI said.

Domestically, the growth of externally-oriented services sectors, such as finance and insurance and wholesale trade has slowed, MTI said. It also noted that the improvement seen in the manufacturing sector may not be sustained in the light of sluggish global economic conditions. 

Meanwhile, the construction sector is also likely to see weakening growth in the coming quarters, as firms become more pessimistic about their business outlook.

The manufacturing sector expanded 1.1 per cent from a year ago for the second quarter, reversing from the 0.5 per cent decline in the previous quarter. Growth was supported by the electronics and biomedical manufacturing clusters.

Growth in the construction sector moderated to 3.3 per cent year-on-year compared to 4.0 per cent in the first quarter, weighed down by a fall in private sector construction works.

Services producing industries eased to 1.4 per cent compared to 1.7 per cent in the first quarter, due mainly to weaker wholesale and retail trade, information and communications, finance and insurance and business services. — TODAY