Chart of the Day: These are the biggest headwinds to 2013 GDP growth

Q1 GDP is around -1.8% YoY.

According to Nomura, IP fell by 16.6% y-o-y in February from -0.1% in January, lower than consensus expectations of -7.6%, but closer to our forecast of -15.8%. 

Even after accounting for the lunar new year effect, IP was still very weak, contracting by an average of 8.4% y-o-y in January/February from -0.3% in Q4 2012.

On a seasonally-adjusted month-over-month basis, IP fell 0.7% in February after already dropping by 9.1% in January.

Here's more from Nomura:

This print is consistent with the weak February NODX number earlier in the month. The weakness was broad based as both biomedical and electronics production contracted further by 18.0% y-o-y and 21.1% y-o-y in February from -15.4% and -3.0% in January, respectively.

This poses significant downside risks to our full-year 2013 GDP growth forecast of 2.4%, and indeed, the MAS‟s 1-3% forecast range.

Our monthly GDP composite index (MCGI) shows that Q1 GDP growth is currently tracking -1.8% y-o-y (or -5.8% q-o-q saar).

This already takes into account some improvement in March IP, as some volatile components, such as pharmaceuticals, are likely to bounce back. But we think this is not going to be sufficient to avoid negative GDP growth in Q1.