Fearless forecast: February industrial production to dip 1.5%

Following a very disappointing NODX.

According to OCBC, on monetary policy, the improving global outlook and persistently high inflation imply that the MAS will ost likely continue to maintain its Sing NEER appreciation stance.

"Not that we truly believe that the strong Sing dollar policy will help to curb the present bout of domestically induced inflation, but rather, there is not much room for policy manoeuvre given current economic conditions," OCBC said.

While there have been fear of slowing growth momentum due to declining competitiveness, the authority have put it clearly before that inflation, ironically, is still their primary concern and that the tight monetary policy is to complement the current restructuring.

Here's more from OCBC:

So, as long as the economy does not dip into a recession, and we’re not talking about a mere technical recession per se, the MAS will continue to maintain its current strong Sing dollar policy.

And the string of poor economic results will continue with today’s industrial production index for February.

It will likely report a decline of 1.5% YoY, down from -0.4% in the previous month. This follows an exceptionally poor outcome in the export performance (NODX) lately.

The headline non-oil domestic exports plunged 30.6% YoY in the month. While we have pointed out that the figures have been massively distorted, the point to note is that that those factors affecting NODX, will likewise impact the industrial production figures too.

Moreover, judging from the extent of the fall in the NODX figure, any downside surprise to today’s number should not come as a surprise.