Singapore: Q2 GDP faces downside risks – UOB

Economist Barnabas Gan at UOB Group noted that GDP figures for the second quarter in Singapore could be revised lower.

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“Singapore’s industrial production disappointed market expectations with a 6.7% y/y contraction (+0.2% m/m sa) in June 2020, marking the second month of negative growth.”

“The month of June saw the implementation of Phase One, specifically from 2 – 17 June 2020. Although it saw a lessened degree of social distancing measures in Phase One, only a third of Singapore’s workforce was able to resume work at their workplaces. Coupled with supply chain disruptions and poor external environment then, it is of no surprise that manufacturing pace saw another month of contraction.”

“The sustained fall in Singapore’s industrial production suggests downside risks to 2Q20 GDP. Manufacturing contracted 0.7% in 2Q20, after accounting for the downward revision of May’s manufacturing pace and the latest June’s numbers. This pales against the advanced estimates which pencilled manufacturing growth at +2.5%. Assuming construction and services growth at -54.7% and -13.6% respectively in 2Q20, Singapore’s 2Q20 GDP should be revised slightly lower to - 13.2% y/y (-42.9% q/q saar), versus advanced GDP estimates of -12.6% y/y (-41.2% q/q saar).”