“While external demand headwinds continue to cloud the outlook, [GDP] has not deteriorated further since July, with MAS likely not expecting a hard landing in its baseline scenario. 2023 growth is likely seen close to trend, and as such, the output gap is likely seen remaining mildly positive, or at least not turn negative, similar to in April and July,” say Kit and Koh.
Citi Research analysts Kit Wei Zheng and Jester Koh believe that the Monetary Authority of Singapore (MAS) is likely to raise 2022 core forecasts by 50 basis points (bps) to around 4%, with a “60% probability” of an upward re-centring of at least 100bps and a concurrent 50bps slope steepening to 2% per annum in Oct.
In their report dated Sept 17, the analysts write that 3Q2022 gross domestic product (GDP) likely rebounded sequentially — at 0.7% q-o-q on a seasonally adjusted basis, exceeding growth rates preceding the April and July re-centring episodes and close to trend — with the output gap likely still mildly positive into 2023.
