Will 2013 be worse, then?
According to OCBC, Singapore’s 2013 growth will be at a more sustainable 2-3% range, even if 2012 growth undershoots 1.5%.
Here's more from OCBC:
PM Lee said the government is no longer aiming for ridiculously high” growth of the past, but targeting a more sustainable rate of about 2-3% a year.
He also hinted that 2012 GDP growth could undershoot the 1.5% handle. Note bank loans growth bank loans growth rebounded from 16.5% yoy in Sep to 17.9% yoy (+ 1.5% mom) in Oct. Both business and consumer loans picked up on-month, and could signal that the tight labor market continues to be supportive, especially for big-ticket items like mortgages, albeit general commerce slipped 2.3% mom.
Car loans growth going forward could remain impacted by the high COE premiums. For 2013, we tip only around 10% yoy growth in bank loans.
The SGS bond market is likely to be trading in a relatively quiet mode going into the year-end. While growth expectations are somewhat muted for 2013, the inflation environment is easing slightly – headline CPI moderated from 4.7% yoy (+0.6% mom) in Sep to 4.0% yoy (-0.2% mom) in Oct.
However, COE premiums edged higher for the 21 Nov tender, suggesting little respite for the private road transport price segment in the near-term. As such, we expect that investors may remain biased towards yield enhancement, especially higher-yielding corporate bonds for now.
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