Singapore: Challenging external backdrop – Standard Chartered

Analysts at Standard Chartered note that Singapore’s economy expanded 1.2% y/y, lower than the advance print of 1.3%, as the downward revision in services (to 1.5% y/y from 2.1%) outweighed the upward revision to the manufacturing and construction advance prints.

Key Quotes

“More importantly, the Ministry of Trade and Industry (MTI) narrowed the 2019 GDP growth forecast range to 1.5-2.5% from 1.5-3.5% previously, to account for weak Q1 growth. The forecast range for 2019 non-oil domestic exports (NODX) was also lowered to -2-0% from 0-2%.”

“The narrowing of the official GDP forecast to 1.5-2.5% was in line with earlier projections by the government. The Monetary Authority of Singapore (MAS) had noted in April that growth may come in slightly below the mid-point of the 1.5-3.5% forecast range (although one can argue the median forecast of 2% GDP growth now is more than a slight downgrade).”

“Regardless, the MAS’s monetary policy settings are now likely neutral given the growth and inflation outlook, rather than still slightly accommodative, in our view.”