Singapore Contracts 7.8%

From Bloomberg:

Gross domestic product fell an annualized 7.8 percent in the second quarter from the previous three months, when it climbed a revised 27.2 percent, the trade ministry said today, citing preliminary data. The median estimate of 13 economists surveyed by Bloomberg News was for no growth.

Europe’s debt crisis and rising U.S. joblessness have threatened demand for exports from Asia and wiped more than $2 trillion off stocks worldwide since the beginning of May. China’s economic expansion eased in the second quarter and India’s industrial production unexpectedly slowed in May, reducing the scope for monetary policy tightening as regional growth cools.

“The ongoing debt crisis in Europe and the very slow recovery in the U.S. are the risk factors for the Singapore economy,” said Chow Penn Nee, an economist at United Overseas Bank Ltd. in Singapore. “With the slowing growth and easing inflation, we are not expecting the Monetary Authority of Singapore to move at the upcoming policy meeting.”

The Singapore dollar, the best performing Asian currency after the South Korean won in the past year, traded at S$1.2176 against its U.S. counterpart at 10 a.m. today, paring gains after climbing to a record S$1.2156 before the report. The currency has reached unprecedented levels since the central bank, which uses the exchange rate to manage inflation, said in April it would allow further appreciation to tame price gains.