Singapore: Growth weakness persisting – TDS

According to Mitul Kotecha, senior emerging markets strategist at TD Securities, Singapore’s economy appears to have lost more momentum over recent months as reflected in hard data such as trade and industrial production.

Key Quotes

“The advance reading of Q1 GDP growth scheduled to be released on Friday is likely to reveal a further deceleration to 1.5% y/y. The MAS survey of professional forecasters revealed an expected growth rate of 2.5% y/y in 2019, a slight decline from 2.6% expected in December.”

“We expect MAS to continue to forecast growth at slightly below the mid-point of its 1.5% to 3.5% forecast range. Forward looking indicators point to worse to come, with the PMI decelerating over recent months, albeit still remaining above the 50 boom/bust level.”

“External pressures are likely to further weigh on trade as global growth continues to decelerate even as central banks globally turn more dovish.”

“On the domestic front, private consumption has weakened, with retail sales having trended lower, with the exception of what was likely a temporary bounce in January, largely due to a 20% y/y increase in car sales and pre-Chinese new -year sales. February data schedule to be released on Friday is likely to show that retail sales weakened further.”