Photographer: SeongJoon Cho/Bloomberg

Singapore’s Export Growth Beats Forecasts for Second Month

  • Non-oil exports up 9.4% in Dec with strong electronics sales
  • Exports to China rose 40%, while demand from U.S. fell 17%

Singapore’s exports surged above economists’ forecasts for a second consecutive month, signaling a recovery in the trade-dependent economy.

Key Points

  • Non-oil domestic exports rose 9.4 percent in December from a year ago, International Enterprise Singapore said in a report. The median estimate of 15 economists surveyed by Bloomberg was for a 5.8 percent increase.
  • Electronics exports increased 5.7 percent in the period, after a 3.5 percent gain in November.
  • Non-oil exports rose 1 percent in the month, compared with a median forecast for a 5.5 percent contraction.

Big Picture

A slowdown in global trade and lower oil prices have undermined growth in the export-driven economy, but a strong reading in November, when exports soared 11.5 percent despite a forecast for a small decline, has given hope for some improvement. The economy is expected to continue a modest pace of expansion, Ravi Menon, managing director of the Monetary Authority of Singapore, said Monday, with authorities forecasting growth of 1 percent to 3 percent for this year. Trade-oriented industries should benefit from a mild upturn in global and regional electronics, he said. Earlier this month, the trade ministry said preliminary data showed the economy expanded an annualized 9.1 percent in the three months to December from the previous quarter.

Economist Takeaways

  • “Given Singapore is the canary in the coal mine, today’s positive non-oil domestic exports print corroborates with recent trade data which showed a notable rebound in exports in most Asian countries. This suggests the tentative end of the trade recession which has plagued the region since late 2014,” Australia & New Zealand Banking Group Ltd. analyst Weiwen Ng said in a note. “While this development is encouraging, we are cognizant of the risk that the rebound in non-oil domestic exports is in its nascent stage and could be dampened or even derailed by geopolitical tensions and rise in protectionism.”
  • “There are signs of improvement but the improvement will be gradual,” Julian Wee, a Singapore-based senior market strategist at National Australia Bank Ltd., said by phone. “Cyclically, there is a recovery in China but you’re definitely not going back to 8 percent growth. Quarter to quarter there may be some improvement, and that’s what you’re seeing. There will be a deceleration in China’s growth overall.”

Other Details

  • Pharmaceuticals exports rose 7.3 percent in December from a year ago
  • Petrochemicals surged 28.5 percent
  • Exports to China increased by 40 percent from December last year, while those to the U.S. fell 17 percent
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