Singapore: GDP faces positive prospects – UOB

Economist Barnabas Gan at UOB Group comments on the latest Industrial Production figures in Singapore.

Key Quotes

“Singapore’s industrial production expanded 30.0% y/y (+7.2% m/m sa) in May 2021, surprising market estimates for a 24.4% y/y (-0.5% m/m sa) expansion. This is the fastest growth since November 2010 (+41.2% y/y, +1.5% m/m sa).”

“All sub-sectors across the manufacturing spectrum grew on a year-on-year basis, a phenomenon not seen since April 2019.”

“We continue to expect Singapore’s electronic and precision engineering clusters to support the overall manufacturing sector, on the back of global growth and a positive external environment.”

“Given the surprisingly strong industrial production momentum in the first five months of 2021, we are upgrading our manufacturing growth outlook to 8.0% in 2021, from our previous outlook of 5.5%. This would also inject upside risk to Singapore’s full-year growth of 5.5% in 2021. The risk to our outlook appears to be balanced; upside risks to our outlook will include a quicker-than-expected rollout of the COVID-19 vaccine, resulting in an accelerated recovery back to pre-COVID-19 levels. On the other hand, uncertainties surrounding COVID-19 given the introduction of new virulent variants in other parts of the world may inject downside risks to our outlook.”