Singapore: Downbeat growth assessment – Standard Chartered
|Analysts at Standard Chartered notes that Singapore’s final Q2 GDP print expanded by 0.1% y/y (-3.3% q/q SAAR), broadly unchanged from the advance print of 0.1% y/y (-3.4% q/q SAAR).
Key Quotes
“H1-2019 growth was only 0.6% y/y. The Ministry of Trade and Industry (MTI) has lowered the 2019 GDP growth forecast to 0-1% from 1.5-2.5%, given the poor growth outcome so far. The MTI noted that growth is “expected to come in at around the mid-point of the forecast range.” At 0.5%, 2019 growth may be the slowest since 2009. In addition, Enterprise Singapore downgraded its non-oil domestic exports (NODX) outlook for 2019 to -9 to -8% from -2 to 0%. NODX fell 10.7% in 6M-2019.”
“We are currently calling for the Monetary Authority of Singapore (MAS) to ease its monetary policy in October (On the Ground, 2 August 2019, ‘Singapore – Joining the dovish wave’). According to media reports, the MAS is not considering an off-cycle policy meeting, which is in line with our expectations. Our current call is for the MAS to lower the Singapore dollar nominal effective exchange rate (SGD NEER) band slope slightly by 50bps to +0.5% per annum in October.”
“We do not expect the MAS to adjust the centre or width of the SGD NEER policy band. We expect core inflation to remain within the MAS’ forecast range of 1-2% for 2019. But if the MAS projects 2020 core inflation at 0.5-1.5% in the October monetary policy statement, this would increase the risk of the MAS shifting the SGD NEER policy band slope to flat in 2020.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.