Singapore's exports fall the most in six years as a result of the collapse of electronics

SINGAPORE: Singapore's exports fell more than expected in June, marking their biggest drop in six years, amidst sluggish global demand and the Sino-US trade war.

The mediocre trade figures add to the plethora of precarious economic data and reinforce economists' expectations that the central bank could ease monetary policy at its October meeting.

Domestic non-oil exports (NODX) fell 17.3% in June, the fourth consecutive monthly decline, according to data from the Enterprise Singapore commercial agency on Wednesday (July 17th).

This was worse than the 9.9% contraction forecast by 10 economists in a Reuters poll and the largest decline since February 2013, when exports had dropped 33.2% from a year earlier, show the data of Refinitiv Eikon.

"All is bad – we have a global economic slowdown, a trade war and a Chinese slowdown," said OCBC economist Selena Ling.

READ: No rapid recovery of Singapore's exports, more risks of deterioration of growth in 2019: economists

On a seasonally adjusted monthly basis, exports contracted 7.6%, following a revised 5.8% increase in May. The survey called for a contraction of 3.9% from the previous month.

"The outlook (for Singapore's economy) is much more pessimistic now," said Lee Ju Ye, economist at Maybank's Kim Eng.

Exports of electronic products fell 31.9% in June, following a similar decline of 31.6% the previous month.

Integrated circuits, personal computers and disk storage media shrank 33%, 44.6% and 41.7% respectively, contributing the most to the decline in electronic shipments.

Non-electronic exports declined 12.4%, following the 11.1% decline recorded the previous month.

Non-monetary gold (-50.2%), petrochemicals (-16.7%) and pharmaceuticals (-11.3%) were the main factors behind the decline non-electronic shipments.

Overall, exports to most of Singapore's major markets, including China and Europe, fell sharply during the month, although exports to the United States increased slightly.

Hong Kong (-38.2%), China (-15.8%) and the 28 countries of the European Union (-22.1%) were the main drivers of the decline.

READ: Commentary: Singapore and the dreaded R word – recession

June's export figures follow the latest GDP data, well below the economist's estimates.

Singapore's economy grew only 0.1% in the second quarter, its slowest annual pace in a decade, according to official estimates released last Friday.

The latest growth figure reflects the uncertainties and increased risks of the global economy, especially with the trade tensions between the US and China, said Deputy Prime Minister Heng Swee Keat after the release of the data GDP.

However, he said the government did not expect a full year recession for the Singaporean economy, highlighting areas of strength such as the information and communication sectors. communications and construction.

On Tuesday, the International Monetary Fund lowered its economic growth forecast for 2019 to 201%, from 2.3% to 2%, due to global trade tensions.

Singapore's central bank is forecasting growth of 1.5% to 2.5% this year, compared to 3.2% in 2018.

Ms. Ling, of OCBC, said the outlook for Singapore's economy was bleak and that she had reduced her growth forecasts three times this year.

"It does not seem that there is still light at the end of the tunnel," she added.