Apart from Covid-19 worries, Song adds that there are the added risk of geo-politics that could affect the recovery of the economy, including US-China relations, and EU-China relations.
The way DBS chief economist Taimur Baig and economist Nathan Chow see it, the pent-up demand following the easing of the lockdowns across the globe may have led to a few market-relieving real economic data points, it would be “imprudent” to get carried away by this narrative, as there is no sight of a Covid-19 vaccine on the horizon.
In Singapore, headline inflation is expected to dip deeper into negative territory in May with a forecast of -1.4% y-o-y, say Baig and Chow.
"This is even lower than -0.7% in the previous month as further deceleration in growth and low oil prices add on to the disinflationary pressure," they add. "Moreover, the stimulus packages against the impact of the Covid-19 pandemic announced by the government to lower cost of living probably will exert more pressure on inflation".
See also: Singapore’s core inflation rate cools to four-month low
Baig and Chow foresee that industrial output for May is likely to ease to a more sustainable pace of 6.9% y-o-y, down from 13% previously.
A pullback in pharmaceutical production is also expected due to routine plant shutdown, which was reflected in the non-oil domestic export (NODX) performance for the same month, they say.
Following a 4.5% contraction in NODX in May after an average of 13.2% expansion in the preceding two months, UOB analyst Alvin Liew estimates that the manufacturing sector will contract by 7.1% m-o-m in May from the 3.8% growth in April.
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“That will translate into a slower growth of 6.2% y-o-y (from 13.0% y-o-y in April),” he says.
See: Singapore's NODX drops after three consecutive months of growth
