Singapore’s exports rebound but electronics show prevailing weakness

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Singapore’s exports rose unexpectedly in February year-on-year, rebounding from its biggest fall in over two years, data on March 18 showed, but economists say a decline in electronics shipments shows global demand has not improved.

Non-oil domestic exports (NODX) rose 4.9 percent in February year-on-year, data from the trade agency Enterprise Singapore showed, thanks to a surge in exports to China. That marked a sharp turnaround from 10.1 percent contraction the month before and broke a run of three consecutive months of decline.

The February reading was also better than the 3.4 percent contraction predicted in a Reuters poll, however, economists said an 8 percent on-year decline in electronics exports remains a worrying sign for Singapore’s economy.

“What we are more concerned about is the lacklustre print in electronic exports. This reinforces our view for the continued fading of the tech boom that is seen broadly across Asia,” UOB economist Barnabas Gan said, adding that last month’s Lunar New Year break may also have masked underlying export weakness.

February’s electronics reading was an improvement on January’s 15.9 percent contraction.

Exports to the city-state’s top trade partner China jumped 34.4 percent on-year in February – rebounding from a 25.4 percent contraction in January. Exports to the United States rose 6.6 percent from a 4.6 percent decline the previous month.

Shipments of non-monetary gold and pharmaceuticals bolstered February’s reading, jumping 258 percent and 12 percent, respectively.

The city-state is a big regional player in the gold trade, and exports can be impacted by sharp swings in value. Spot gold hit a 10-month high in February, according to Refinitiv data.

But the upswings in these volatile sectors did little to reassure economists wondering whether Singapore’s central bank will be knocked off its tighter policy path at the first of its semi-annual policy meetings next month.

“With the wind of global central banks easing blowing, the MAS (Monetary Authority of Singapore) will find it hard to remain on the tightening path,” ING said in a note following the data release.

On a seasonally adjusted month-on-month basis, exports expanded 16 percent in February after declining 5.7 percent in January. The poll called for a 2.4 percent expansion from the month before.


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