Singapore exports fell more than expected last month from the same period last year on softer US and Chinese demand, the government said yesterday, giving further credence to an economic slowdown this year.
Concerns over the weaker global economic outlook prompted the government this month to narrow its growth forecast for this year to 1 to 2 percent from the 1 to 3 percent it projected earlier.
Singapore’s economy grew a modest 2 percent last year, the weakest rate of expansion since 2009 due to the effects of a global financial crisis.
The government’s trade promotion body, International Enterprise Singapore, yesterday released data showing that the city-state’s non-oil domestic exports last month fell 10.6 percent year-on-year.
The decline is worse than the 2.4 percent contraction in the previous month. It was also worse than the 2.5 percent median estimate of a 2.5 percent decline in a Bloomberg survey of 15 economists.
Electronics exports, such as semiconductors, contracted by 12.9 percent, accelerating from a 1.7 percent decline in June.
Non-electronics exports, including pharmaceuticals, petrochemicals and specialized machinery, fell by 9.5 percent from a 2.6 percent fall in June.
“Indeed, when it rains, it pours. This will add on to the long list of poor data pointing to the risk of an economic contraction ahead,” DBS Bank senior economist Irvin Seah (謝光威) said in a note.
“The writing is on the wall. For those maintaining a sanguine view on the near-term outlook on the economy, this should be a wake-up call,” he said.
The “slowdown in China is the main concern, but sluggish growth in the US and uncertainties surrounding the Eurozone are not helping,” Seah said.
However, CIMB Private Banking economist Song Seng Wun (宋誠煥) urged caution in reading last month’s data.
He said the exports decline was due to seasonal factors such as the Hari Raya Muslim holidays in Indonesia and Malaysia, where companies shut down for a week, as well as severe flooding in China.
“It is not as bad as the headline numbers would have suggested,” Song said, adding that he expected exports to rebound in the coming months.
“The decline was probably exaggerated by the fewer working days in some of the key markets like Malaysia and Indonesia which celebrated the Hari Raya Festivities,” he said.
Exports to Singapore’s top 10 markets declined, except for the EU which expanded by 3 percent.
Exports to China fell 16.6 percent and shipments to the US dropped 19.1 percent, while those to Indonesia shrank 22.6 percent and to Malaysia by nearly 17 percent.
United Overseas Bank said the data was “disappointing,” but expects an export recovery in the second half due to an anticipated pickup in global trade.
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