Singapore's economy unexpectedly shrank in the three months through to June this year, as the deepening Eurozone crisis stunted European demand for the region's goods and manufacturing.
The Trade Ministry confirmed that GDP fell by an annualised 1.1 percent in the last quarter. The drop in GDP missed consensus forecasts of a 0.6 percent gain.
Singapore's decline in exports in May has been widely to blame for the economic shrinkage as Europe's sovereign debt crisis weighed heavily on demand.
Manufacturing slid 6 percent in the last quarter from the previous three months, compared with a massive 20.9 percent gain in the first quarter.
Construction rose by only 0.3 percent, slowing from a 27.9 percent surge.
However, despite the drop in GDP, the economy expanded 1.9 percent from a year earlier, reaching 9.4 percent.
Singapore's incumbent stock index, the Strait Times Index is up by just 0.57 percent as of 0755 GMT. On the year, the index has gained nearly 13 percent.
Still a Beacon For Growth?
Singapore has been hailed as a beacon for growth and resilience over the last few years, after the country seemingly shrugged off most of the global economic woes.
The triple-A rated powerhouse at the heart of Asia has had an economy that has grown faster than all of its regional rivals thanks to a tightly controlled currency and booming exports.
A Moody's Investors Service's most recent report on Singapore highlighted the resilience one of the world's only top-rate economies "despite the openness of its economy and its dependence on global trade and finance."
Singapore's economy expanded by 10 percent in the first three months of the year from the previous quarter and growth has averaged more than 6 percent over the past five years. On purchasing power parity terms, it's the richest nation in Asia and ranks as the top global economy by the World Bank in terms of ease of doing business.
However, the recent set of GDP data could be a warning sign that the slowing expansion in the Asian region, stemming from the Eurozone crisis, has finally hit Singapore.
China is one of the biggest drivers for Singapore's export growth over the last year, but with the Chinese government engineering a slowdown and paring back on imports, the fortunes of Singapore have be making an about turn.
On 13 July, China reported GDP expanded by only 7.6 percent last quarter from a year earlier, compared with an 8.1 percent gain in the previous period.