Singapore banks on unlikely electronics growth as pharma manufacturing declines

It’s expected to contract by 0.2% in 4Q.

The city-state’s bleak manufacturing could possibly register flat growth for the year if electronics sustains its growth in the following month.

According to a report by OCBC, this is a less adverse scenario from an expected 0.6% drop in growth.

"This would shade our 3Q16 GDP growth forecast to 2.0% yoy (+0.8% qoq saar), versus 1.8% yoy previously, and in turn our full-year 2016 GDP growth forecast a tad higher to 1.9% yoy (1.8% previously),” the report noted.

Meanwhile, there is considerable risk that the industrial production performance could still slide back into negative territory for the coming months.

“Moreover, the economic horizon remains clouded by external headwinds like the business concerns about the US presidential elections (with polls suggesting a tight race between Clinton and Trump) and the ongoing domestic economic restructuring efforts,” the report noted.