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Economic Research
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14
April 2017
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Singapore
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Economic Update
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Based
on advanced estimates, Singapore’s economy declined 1.9% QoQ in 1Q17,
seasonally adjusted (SA) and annualised, correcting from a 12.3% surge the
previous quarter. Manufacturing and services activities contracted after
spiking in 4Q16, whereas construction output picked up, cushioning some of
the fall. Going forward, we maintain our projection for Singapore’s GDP to
grow 2.2% in 2017, from +2% last year, backed by:
1.
Higher manufacturing output, underpinned by robust semiconductor,
chemicals and capital goods demand;
2.
Increased growth for export-facing (wholesale trade, logistics, and
finance), as well as IT and communications service providers.
Despite the pick-up, construction work is set
to remain muted, as businesses are still facing a lot of structural
headwinds, which would deter investments, in our view. In addition, the
property market would need to digest an oversupply of residential and
commercial properties coming online this year.
The Monetary Authority of Singapore (MAS)
maintained the slope and width of the SGD nominal effective exchange rate
(S$NEER) policy band. We envisage for MAS to stay pat on monetary easing at
the next meeting in October as well. However, depending on the pace of
decline in property prices, we believe that there is a moderate chance for
further easing in property purchase curbs.
Economist: Ng Kee Chou | +603 92802179
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Friday, April 14, 2017
MAS Stays Pat After Modest 1Q17 GDP Growth
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