Singapore: Non-oil exports post worst contraction in over six years in June
July 17, 2019
Non-oil domestic exports (NODX) plummeted 17.3% year-on-year in June, sharper than May’s 16.3% decline (previously reported: -15.9% year-on-year). The drop-off was significantly larger than market expectations of a 9.9% contraction and marked the worst deterioration since February 2013. On a month-on-month seasonally-adjusted basis, NODX decreased 7.6% in June, contrasting May’s 5.8% increase.
June’s result was driven by a huge tumble in electronic NODX, while non-electronic NODX also fell sharply. The contraction in non-electronic NODX was largely caused by fewer exports of non-monetary gold, petrochemicals, and pharmaceuticals, while lower demand from Hong Kong, China and the EU caused the largest drag on NODX as a whole.
June’s depressed NODX comes as the U.S.-China trade war and weaker global demand for technology is weighing on external demand for Singaporean goods. The external sector will likely remain in the doldrums in the short-term amid trade ructions and weaker economic momentum in key trading partners. The weak trade figures, coupled with tepid inflationary pressures and economic stagnation in Q2, could lead the MAS to consider a more expansionary monetary policy stance at the next meeting in October this year.
Author: Steven Burke, Economist