Singapore: Q1 GDP likely to confirm strong start of 2018 – Standard Chartered

Analysts at Standard Chartered expect Singapore’s Q1 GDP growth to have picked up to 4.6% y/y (close to a five-year high) from 3.6% in Q4-2017.

Key Quotes

“We expect. Manufacturing likely continued to support GDP growth in Q1, with industrial production (IP) up 13% y/y in January-February, higher than full-year 2017 IP growth and growth of 6.9% in the same period last year. Broadening activity within the manufacturing sector is also a positive sign.”

“A recovering services sector on the back of an improving labour market may also have supported growth in Q1. Job creation turned around in Q4 – the resident unemployment rate was the lowest in five quarters at 3%, while real wage growth picked up to 3.6% y/y, the highest in five quarters.”

“Our GDP growth tracker suggests upside risk to our Q1 GDP growth forecast.”

“With growth and inflation conditions having improved markedly versus conditions in 2015-16 – when the Monetary Authority of Singapore (MAS) conducted its easing cycle – we view the current monetary policy settings as too accommodative and expect a measured recalibration by the MAS.”