Domestic demand growth remains impressive with retail sales rising by 1.3%.
DBS says the risk is that the stock market slump and deterioration of consumer and business sentiments will negatively impact real growth in the remaining months of 3Q.
Here’s more from DBS:
|Industrial production rose as expected in July, by 2.4% MoM sa, mirroring the rises in July export orders and exports reported earlier this month; and in contrast to the weakness in private sector PMI (46.1). Meanwhile, domestic demand growth has remained impressive, with retail sales reporting a 1.3% MoM sa rise in July backed by the continued improvement in the labor market, declines in oil prices and recovery of consumers’ real purchasing power. There shouldn’t be a QoQ growth contraction in 3Q based on macroeconomic data available thus far. The risk is that the stock market slump and deterioration of consumer and business sentiments will negatively impact real growth in the remaining months of 3Q. The medium term outlook for exports has also turned weaker due to the expectations of fiscal tightening in the G2 economies. Our 2011-2012 GDP growth forecasts (5.0% and 4.3% respectively) are currently under review|
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