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S’pore key export plunge 24% in Feb

Posted on: March 17, 2009


AFP – Wednesday, March 18

SINGAPORE (AFP) – – Singapore’s key exports plunged 24 percent in February, in a further sign the city-state is headed for its worst-ever recession amid plummeting global demand for its products.

It was the 10th straight month of decline in key non-oil domestic exports, following a record 35 percent drop in January, according to government figures released Tuesday.

February’s fall was roughly in line with the average 23.6 percent fall tipped by analysts in a Dow Jones Newswires poll.

On a seasonally adjusted month-on-month basis, however, exports grew 1.8 percent from January, the International Enterprise Singapore (IE Singapore) trade promotion agency said.

Total trade in February fell 22.1 percent to almost 54 billion Singapore dollars (35 billion US) as shipments to the city-state’s top 10 markets, except China, were down, according to the monthly data.

Demand from the recession-hit US shrank the most as shipments fell 44.4 percent to 1.03 billion dollars, following a 50 percent decline in January.

Shipments to the European Union skidded 36.7 percent to 1.4 billion dollars, while exports to Japan plummeted 38.9 percent to 581 million dollars, IE Singapore said.

Last month’s non-oil export figures were pulled down by continued weak demand for electronics, pharmaceuticals and petrochemicals, the main staple of Singapore’s exports.

Overall electronics exports dropped 31.9 percent to 3.5 billion dollars, pharmaceuticals fell 23.4 percent to 1.3 billion dollars while petrochemicals declined 42.6 percent to 562 million dollars, IE Singapore said.

The NODX data is a closely watched barometer for the Singapore economy, which is extremely dependent on external trade.

Analysts said the latest trade data did not bode well for the city-state in the next few months.

“I think you can expect double-digit contraction at least in some months in the first half of the year,” said Alvin Liew, a Singapore-based economist with Standard Chartered Bank.

There is a chance of a turnaround possibly late in the year as massive stimulus packages in major world economies result in increased demand for Singapore-made goods, he said.

“We see those stimulus packages hopefully filtering through in the second half,” said Liew. “We can’t spend ourselves out of the recession but we may benefit from the stimulus packages in other countries.”

Song Seng Wun, regional economist with CIMB-GK brokerage, said he expected monthly non-oil exports to shrink by 20 to 40 percent until the fourth quarter.

The drop in Singapore shipments mirrored similar declines in other Asian export-driven economies such as Taiwan and South Korea, Song said.

London-based consultancy Capital Economics said in a report the weakness in Asian exports had begun to hurt private domestic demand due to rising corporate bankruptcies, more job losses and falling consumer confidence.

“Large fiscal packages have been announced across the region but the benefits are likely to be felt late in the year,” it said.

Singapore’s economy is forecast to slip into its worst ever recession this year with gross domestic product likely to shrink by up to 5.0 percent.

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