Singapore growth likely to remain subdued into 2016

Singapore November industrial production release confirms that the headwinds of continuing weak external demand and a slow inventory adjustment are likely to keep the growth momentum subdued in 2016.

The external growth outlook that is exerting drag on domestic industrial sector is in line with the Ministry of Trade and Industry's assessment of domestiv growth being resilient in a difficult environment.

The MTI expects growth to be close to 2.0% for 2015 and 1-3% in 2016 in the absence of a meaningful external uplift. While the near-term outlook is still challenging, policy is tilting increasingly toward ensuring medium- to long-term competitiveness. 

"The MAS remains firmly focused on the key medium-term inflation driver - the tight labour market - a view the MTI echoed in its statement. Unless there is a systemic shock, we expect no change policy in the April 2016 MPS", says Barclays in a research note.