Con­cern as ex­ports worse than ex­pected

The Myanmar Times - - International Business -

SIN­GA­PORE ex­ports fell more than ex­pected in July from the pre­vi­ous 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 1-2 per­cent in­stead of 1-3pc as pro­jected ear­lier.

Sin­ga­pore’s econ­omy grew a mod­est 2pc in 2015, the weak­est rate of ex­pan­sion since 2009 due to the ef­fects of a global fi­nan­cial cri­sis.

Yes­ter­day, the gov­ern­ment’s trade pro­mo­tion body In­ter­na­tional En­ter­prise Sin­ga­pore re­leased data show­ing that the citys­tate’s non-oil do­mes­tic ex­ports fell 10.6pc year-on-year in July.

The de­cline is worse than the 2.4pc con­trac­tion the pre­vi­ous month. It was also worse than the 2.5pc me­dian es­ti­mate of a 2.5pc de­cline in a Bloomberg sur­vey of 15 econ­o­mists.

Elec­tron­ics ex­ports such as semi­con­duc­tors con­tracted by 12.9pc, ac­cel­er­at­ing from a 1.7pc de­cline in June.

Non-elec­tron­ics ex­ports, in­clud­ing phar­ma­ceu­ti­cals, petro­chem­i­cals and spe­cialised ma­chin­ery, fell by 9.5pc from a 2.6pc 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 for Sin­ga­pore,” said DBS Bank se­nior economist Irvin Seah.

“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 all should heed.”

The “slow­down in China is the main con­cern but slug­gish growth in the US and un­cer­tain­ties sur­round­ing the Euro­zone are not help­ing”, Mr Seah said.

But CIMB Pri­vate Banking economist Song Seng Wun urged cau­tion in read­ing the July data.

He said the ex­ports de­cline was due to sea­sonal fac­tors like the Hari Raya Mus­lim hol­i­days in In­done­sia and Malaysia where com­pa­nies shut down for a week, as well as the se­vere flood­ing in China.

“It’s not as bad as the head­line num­bers would have sug­gested,” Mr Song told AFP, adding he ex­pects ex­ports to re­bound sig­nif­i­cantly 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.”

Ex­ports to Sin­ga­pore’s top 10 mar­kets de­clined, ex­cept for the EU which ex­panded by 3pc.

Ex­ports to China fell 16.6pc and ship­ments to the United States dropped 19.1pc, while those to In­done­sia shrank 22.6pc and Malaysia by nearly 17pc.

United Over­seas Bank said the data was “dis­ap­point­ing” but ex­pects an ex­port re­cov­ery in the sec­ond half due to an an­tic­i­pated pick-up in global trade. –

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