Singapore's weak December IP puts MAS in a pickle

Slow growth adds to inflation headaches.

Singapore reported over the weekend that December industrial production declined on an over-year basis by less than expected (-0.6% y/y, consensus: -4.8% y/y). For the whole year, IP declined by -0.1%.

"On the positive side, sequential growth increased by 5.4% m/m sa as growth in pharmaceuticals offset weakness in the electronics sector. Singapore’s economic momentum remains weak, in contrast with other regional economies which have shown signs of a pickup in recent months," said BBVA.

But it noted that "The Monetary Authority of Singapore (MAS) is in a difficult position as it needs to tackle twin challenges of still-high inflation (4.3% y/y in December) alongside sluggish growth momentum. The MAS’s next meeting will be held in April."