Singapore: September IP growth surprises lower but implies an upward revision to Q3 GDP growth

Industrial production (IP) growth moderated to a lower-than-expected 3.4% y-o-y in September from 15.4% in August, led by electronics and pharmaceuticals. This still suggests Q3 GDP growth may be raised to 5.6% y-o-y from the government's advance estimate of 5.4%, bringing the Q1-Q3 average to 6.1% from 6.0%. We maintain our above-consensus 2026 GDP growth forecast of 5.7%, above the official forecast range of 4.5-5.5%, but we continue to flag upside risks. IP growth for Q3 moderated to a still-robust 8.5% y-o-y from 13.2% in Q2, exceeding the 7.5% in the Q3 GDP advance estimate. Electronics output growth declined sharply to 5.7% y-o-y from 28.3%, while precision engineering cluster growth remained strong at 31.0%. Pharmaceuticals output deteriorated to -65.9% y-o-y from -4.0% on unfavorable base effects; chemical output improved to -4.6% from -12.8%, with petroleum recovering to 4.6% while petrochemicals stayed at -24.3%.