* Jan industrial output +2.2 pct y/y, -6.0 pct m/m
* Semiconductor Jan output +25.8 pct y/y
* Analysts say Lunar New Year holiday had impact
SINGAPORE, Feb 24 Singapore's industrial
production, which surged in the final months of 2016, shrank
more than expected in January compared with the previous month,
data showed on Friday.
Manufacturing output fell 6 percent from December on a
seasonally adjusted basis, more than double the 2.6 percent
contraction predicted in a Reuters poll.
The contraction ended a five-month streak of monthly gains
and was the biggest shrinkage on a month-on-month, seasonally
adjusted basis since January 2014.
On an annual basis, manufacturing output was also weaker
than expected in January, growing 2.2 percent compared to the
predicted 8.4 percent expansion predicted in the Reuters survey,
data from the Singapore Economic Development Board showed.
Analysts said the January data, released by the Singapore
Economic Development Board, was impacted by the timing of the
Lunar New Year holiday, which began late that month.
Manufacturing output has been seeing exceptionally strong
growth the past five months, and the expected end to the trend
is seen by some economists as a "sequential correction".
Taking into account both the December and January numbers,
manufacturing in Singapore is "still quite resilient", said
Michael Wan, an economist at Credit Suisse.
The January slip comes after Singapore's industrial
production in December grew at the strongest pace in five years,
jumping at a revised 22.1 percent from a year earlier, thanks to
a surge in electronics output.
SURGE FOR ELECTRONICS
The electronics sector grew 14.8 percent on an annual basis
in January. Semiconductor output was 25.8 percent higher than a
Experts say that the electronics surge partly stemmed from
seasonal holiday demand and a global shift toward new
The late 2016 bounce in electronics shipments has caused
many analysts to the central bank will keep its exchange-rate
based policy unchanged this year.
Wan said he changed his view on what the Monetary Authority
of Singapore will do in April, after the Singapore budget
contained measures that could add to inflationary pressures,
such as plans to increase water prices 30 percent in two phases,
starting in July.
Some measures "should mean stronger inflation in 2017... so
we removed our forecast for MAS to ease in April," he said.
Singapore has had lacklustre economic growth the past two
years as sluggish global demand weighed on exports. Growth
picked up late last year with the economy expanding at a faster
pace in the final three months than initially thought.
However, the government has warned that the outlook remained
hostage to policy and protectionist risks in the United States.
(Reporting by Fathin Ungku and Masayuki Kitano; Editing by