SINGAPORE (AP) — Singapore's economic growth slowed in the first quarter as the government warned Thursday that political upheaval in Europe threatens to undermine the global economy.
Gross domestic product expanded 1.6 percent in the January to March period from a year earlier, down from 3.6 percent in the fourth quarter, the Trade and Industry Ministry said in a statement. Manufacturing dropped 1 percent.
Political and fiscal turmoil in Europe could worsen the continent's debt crisis and slow the global economy, the ministry said.
"A disorderly sovereign debt default in the eurozone cannot be ruled out at this stage," the ministry said. "If it materializes, there will be considerable downsides for the global economy and Singapore's externally oriented industries."
Singapore relies on manufacturing, finance and tourism to provide the island nation of 5.2 million people one of the world's highest standards of living. With a tiny domestic market, the city-state depends on international trade and is vulnerable to volatile global demand.
The ministry said it left unchanged its growth forecast for this year of 1 percent to 3 percent.
There were signs of improvement in the economy as GDP grew a seasonally adjusted, annualized 10 percent in the first quarter compared with the fourth quarter, avoiding a recession after falling 2.5 percent in the October to December period, the ministry said. Construction jumped 32 percent from the fourth quarter.
The first quarter growth figures were almost the same as preliminary results announced by the ministry last month.
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