Downbeat export numbers released yesterday have got the experts anticipating a rocky road ahead for the Singapore economy.
Non-oil domestic exports (Nodx) - the main gauge of shipments from here - dipped a worse than expected 4.6 per cent last month from the same period last year.
This grim figure, coupled with underwhelming advance figures for economic growth released on Monday, is causing a rethink on full-year economic growth.
The biggest drag on exports was the important electronics segment, where exports slumped 17.4 per cent last month. They had fallen 15.3 per cent in May.
"Currently, the Singapore export plane is flying with only one engine, namely the non-electronics, working at this juncture," said OCBC Bank economist Selena Ling. The longer the turnaround in the electronics sector takes, the more likely that full-year Nodx growth will "undershoot" the official forecast, she added.
Citi economist Kit Wei Zheng said: "There are few signs that the hoped-for export recovery in the second half is about to materialise."
On Monday, the Government released figures showing economic growth slowed to 2.1 per cent in the second quarter, with weak manufacturing being the main culprit. The latest bearish figures released by trade promotion agency IE Singapore led some experts to trim their full-year forecast for economic growth.
One was Bank of America Merrill Lynch economist Chua Hak Bin, who cut his growth forecast for this year from 3.6 per cent to 3 per cent. "Singapore is losing its capability to capitalise on global upswings," he said.
Earlier this week, he had cautioned in a report that Singapore's economic restructuring process "seems to be failing".
Last month's 4.6 per cent slide in Nodx was worse than expected. A poll conducted by Bloomberg arrived at a consensus forecast of a 2.7 per cent pullback.
The slump in electronics was largely the result of falls in various shipments, including PCs.
"While we continue to expect sequential improvements in electronics exports driven by stronger external demand, a one-off loss of manufacturing capacity in semiconductors will continue to weigh on headline growth," said Barclays economist Leong Wai Ho.
On a brighter note, non-electric shipments expanded by 1.3 per cent last month after declining 2.4 per cent in May, led by rises in pharmaceutical, petrochemical and printed matter exports.
Non-oil domestic exports to all of Singapore's top 10 markets except Malaysia, Indonesia, China and Taiwan, dropped last month. The top three contributors to the contraction were Hong Kong, South Korea and the European Union.
This article was first published on July 18, 2014.
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