Singapore’s exports declined the most in 14 months in December as manufacturers shipped fewer electronics and pharmaceuticals, hurting economic recovery.
Non-oil domestic exports slid 16.3 percent from a year earlier, after a revised 2.6 percent drop in November, the trade promotion agency said in a statement today. The median of 18 estimates in a Bloomberg News survey was for a 7.6 percent decline. The drop was the most since October 2011, based on previously reported data. Exports rose 0.5 percent in 2012, the worst performance in three years, according to Bloomberg calculations.
The World Bank this week lowered its global growth forecast for 2013 as austerity measures, high unemployment and low business confidence weigh on developed economies. The decline in shipments in December raises the possibility that the island slid into a recession last quarter, in contrast to preliminary data showing otherwise, Bank of America Corp. economist Chua Hak Bin said.
“The ugly export reading raises the specter of recession once again,” Chua said. “There is a high likelihood that industrial production also contracted sharply in December. These are signs that Singapore’s manufacturing is facing hollowing out pressures, especially given the better trade data seen in Northeast Asia and Malaysia.”
The Singapore dollar was little changed at S$1.2240 against the U.S. currency as of 8:49 a.m. local time. It gained more than 6 percent last year, and reached a record in October after the central bank said it would maintain a modest and gradual appreciation.
The third-best performing Asian currency in 2012 has failed to stem inflation in a nation that uses its exchange rate rather than borrowing costs to manage prices. Instead, the Singapore dollar’s rise last year may be weighing on the manufacturing industry, economists including Citigroup Inc.’s Kit Wei Zheng have said, hurting an economy where total exports are equivalent to more than one-and-a-half times its gross domestic product.
Singapore’s growth in 2012 was the slowest in three years and the government forecasts exports will rise 2 percent to 4 percent in 2013, restrained by a faltering recovery in global demand. The government predicts economic growth of 1 percent to 3 percent this year.
“The electronics sector has faced a particularly tough time,” Frederic Neumann, co-head of Asian economics research at HSBC Holdings Plc in Hong Kong, said before the report. “We will have to be deeper into 2013 before exports pick up more notably as conditions in the U.S. and Europe improve.”
Non-electronics shipments, which include petrochemicals and pharmaceuticals, slid 14.8 percent last month from the previous year. Petrochemical exports climbed 4.7 percent, while pharmaceutical shipments decreased 11.5 percent after rising 29.6 percent in November.
Singapore’s non-oil exports rose a seasonally adjusted 1.8 percent last month from November, when they dropped a revised 0.4 percent, today’s report showed.
GDP rose an annualized 1.8 percent in the three months to Dec. 31 from the previous quarter, when it contracted a revised 6.3 percent, the government said Jan. 2. The figures were computed largely from data for October and November and may be revised next month.
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