SG Economy

Economy: Singapore's Dec industrial activity rose much faster than all economists had expected, coming in at +6.2% YoY, vs the consensus for a 1.4% YoY fall, outperforming Taiwan and South Korea. The stronger numbers were driven by better electronics and petrochemical output. Compared with its North Asian rivals, Singapore's export outlook looks good over the medium term. As an economy open to the vagaries of the trade cycle, CS believe that Singapore's industrial activity will continue to improve over the coming quarters. With the US looking more buoyant, coupled with a Europe that is continuing its climb out of the mire, world trade growth should be stronger in 2014 than in 2013, benefiting Singapore's exports and manufacturing sector. CS doubt that the MAS will choose to ease the pace of exchange rate appreciation at its upcoming meeting in Apr. Growth looks to be getting better, while MAS core inflation looks to be picking up sequentially too due to the lagged impact of stronger wage growth.