Chart of the Day: Singapore's economic outlook still bleak amid less severe decline in GDP growth

Industrial output to slide by 3.4%.

Negative inflation remains an issue, with housing transport and healthcare expected to lead the decline.

According to a report by DBS, headline CPI inflation for April is likely to remain benign. A decline of 0.1% YoY has been penciled into their forecast.

Separately, first quarter GDP growth will be revised marginally upward to 2.3% YoY (2.4% QoQ saar), up from the advance estimates of 2.1% YoY (1.1% QoQ saar).

The main reason for the revision is that March industrial production had surprised on the upside. The headline number came in at -5.5% YoY against market expectation of -5.8%. Moreover, the decline was less severe than the 8% drop factored in the advance GDP estimates.

Plainly, this will bring overall manufacturing growth in the quarter to -2.5%, up from the advance projection o -3.4%. And this upward adjustment will likely contribute to an addition 0.2%-pt increase in overall GDP growth.

Here’s more from DBS:

That said, the outlook is still dicey. Industrial production for April will add more evidence to that. Overall industrial output for the month is expected to decline by 3.4% YoY. This is supported by the pullback in the non-oil domestic exports (NODX).

Headline NODX for April moderated to just 2.2% YoY, following a stunning 18.5% surge in the previous month. Sequentially, export sales fell by 8.7% MoM sa, compared to a 23.1% leap in March.

Electronics exports have dipped back into its doldrums (-3.8% YoY) while non-electronics NODX have picked up some of the slack. More importantly, without the significant boost from some one-off factors, export performance could have been worse.