By Fathin Ungku
SINGAPORE, Nov 26 (Reuters) – Singapore’s industrial production unexpectedly rose in October, and marked its biggest jump in nearly a year, in another sign of respite for the Asian bellwether economy.
The trade-reliant city-state, which has been hit by the prolonged Sino-U.S. tariff dispute, revised up its third-quarter economic growth last week, comfortably avoiding a recession which some economists had feared after a sharp mid-year contraction.
Manufacturing output rose 4% in October from a year earlier, data from the Economic Development Board showed on Tuesday, compared with a revised 0.7% rise in September.
That was much higher than a 1.7% fall predicted in a Reuters poll, and marked the biggest increase since November 2018, according to Refinitiv data.
Sustained growth in pharmaceuticals output, which rose 29.6% on-year after a 28.2% jump in September, and a recovery in the electronics segment, which rose 0.4% after months of decline, were seen driving October’s rise.
“This reinforces the story the electronics downcycle is at its end,” Maybank Kim Eng economist Lee Ju Ye said.
“A better than expected recovery will be led by the manufacturing sector, barring the downside risk of December tariffs being implemented.”
Completion of the first phase of a trade deal between China and the United States had been expected in November, but sources say it could slide into the new year, as Beijing presses for more extensive tariff rollbacks and Washington counters with its own demands.
On a month-on-month, seasonally adjusted basis, Singapore’s industrial production rose 3.4% in October, after a revised 4% rise in September. The median forecast in a Reuters poll was for a fall of 0.5%.
Less gloomy prospects for the city-state, which is due to hold an election within months, has prompted the government to tighten its 2019 growth projection toward the top of its previous forecast range.
But trade minister Chan Chun Sing remained cautious, saying in a Facebook post last week that it was “premature” to say the worst may be over for Singapore’s economy.
“The journey ahead is still long. The world’s many uncertainties remain. Singapore can be easily affected by the many downside risks. So let’s not get ahead of ourselves,” Chan said.
Singapore’s central bank eased monetary policy in October for the first time in three years to shore up slowing growth. It said last week that policy remains appropriate and is not scheduled to meet again until April 2020.
(Reporting by Fathin Ungku; Editing by John Geddie and Kim Coghill)
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