IT’S a quieter week ahead on the economic calendar, with just monthly rubber statistics for February in focus.
In January, production of natural rubber decreased 8.2% to 45,735 tonnes as compared to 49,825 tonnes in the previous month. Year-on-year (y-o-y) comparison also showed a decrease of 31%.
Rubber gloves were the main export item with an export value of RM4.6bil in December 2020 that increased further to RM5.6bil in January 2021. The US, Germany and China were among the highest importers of rubber gloves.
China GDP, trade data
CHINA’s annual gross domestic product (GDP) growth rate is set to surge in the first quarter, given the economic slump seen this time last year as the pandemic struck and the economy locked down.
According to IHS Markit, the growth could accelerate from 6.8% in the fourth quarter to around 19%, though the pace of expansion will likely cool in the remaining quarters of the year.
Bloomberg estimates an 18.6% growth y-o-y in its first quarter GDP while UOB estimates a 13.5% y-o-y growth.
ING said China was the first to enter the Covid-19 economic slump that dented its GDP growth by -6.8% y-o-y in the first quarter of 2020.
The research house said the low base effect positioned it for a strong bounce in yearly growth in the first quarter of this year.
Attesting to this was an exceptional surge in high-frequency activity indicators – a 61% y-o-y jump in exports and around 35% y-o-y surges in industrial production, fixed-asset investment, and retail sales in Jan-Feb.
ING said the March figures for these indicators will also arrive simultaneously as Q1 GDP, and they should continue to reinforce ongoing economic strength.
This imparts upside risk to ING’s view of 12% y-o-y 1Q GDP growth, which is sitting at the bottom of market estimates ranging up to 22% growth.
Economists expect China’s exports to expand 32% while imports to grow 22%.
Singapore GDP, monetary policy
SINGAPORE’s Monetary Authority of Singapore (MAS) is expected to release its monetary policy statement alongside its advance Q1 GDP estimate on Wednesday.
UOB Global Economics & Markets Research said while it expects the MAS to keep monetary policy unchanged in April, it expects the central bank to adjust its rhetoric to acknowledge the higher import prices and stronger inflationary pressures, especially in 2H21.
As for the advance Q1 GDP estimate, market expectation is for the GDP decline to narrow from -2.4% in 4Q 2020, while the sequential expansion pace may slow to 0.8% quarter-on-quarter seasonally adjusted annual rate from 3.8% in Q4.
UOB is more optimistic and expects Q1 to return to positive growth of +0.8% y-o-y following the strong manufacturing performance in January and February.