ASEAN KEY DESTINATIONS
Singapore exports fall most in 3 years in March
SINGAPORE exports tumbled at their fastest pace in three years in March on falling shipments to Europe and China, official data showed yesterday, supporting forecasts for slower economic growth and further monetary easing this year.
Non-oil domestic exports shrank 15.6 per cent year-on-year for the month, trade promotion body International Enterprise (IE) Singapore said, worse than the 12.3 per cent fall analysts had projected.
It was also the trade-reliant city-state’s worst export performance since a 30.6 per cent year-on-year decline in February 2013, Singapore’s United Overseas Bank (UOB) said.
“Singapore exports remain entrenched in a rut, raising the odds of downside risks to the local economy’s growth,” ANZ Research said in a note.
“If the current trend persists, it could increase the possibility of a central bank easing at their next policy review in October.”
The Monetary Authority of Singapore last Thursday announced a surprise easing of monetary policy to kickstart the stuttering economy by boosting exports as analysts warned of a possible recession.
In a statement, IE Singapore said electronics exports, such as semiconductors, shrank 9.1 per cent in March, compared to a 0.7 per cent expansion in February.
Non-electronics shipments, including pharmaceuticals and petrochemicals, declined 18 per cent, reversing the previous month’s 2.6 per cent growth.
There was a notable dip in demand from the European Union and China, both major markets for Singapore.
Exports to the EU plunged 39.1 percent from 16.1 per cent growth in February while shipments to China dropped 14 per cent, accelerating from a 1.2 per cent decline.
Exports to the US fell at a slower 6.2 per cent from 4.2 per cent growth in February.
UOB said exports “will likely remain weak” in the first half but should improve in the second half to end the year on a slightly positive note.
“However, there could be downside risks to our forecast should the uncertainties in China’s growth and oil prices perpetuate,” it said.
The government projects economic growth at 1.0-3.0 per cent this year, but private sector economists expect it to come in at the lower end of the range. The economy grew 2.0 per cent last year.
DBS Bank senior economist Irvin Seah said last week he expects growth this year at 1.5 per cent, which implies at least one quarter of contraction.
But the risk of a technical recession – two successive quarters of shrinkage – should not be discounted, he added.
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