Singapore's slowing economy took another hit on Friday with the government reporting that key non-oil domestic exports (NODX) fell 5.6 percent year-on-year in May, the first contraction since mid-2002. The decline, following 6.7 percent growth in April, surprised economists who had been expecting growth of 1.5-4.4 percent, with the vital electronics sector underperforming.
On a monthly basis, NODX fell 5.3 percent to 10.39 billion Singapore dollars (6.3 billion US) in May, according to the government's trade promotion agency, International Enterprise Singapore. In April, exports rose 4.6 percent from March.
"We think it's a bad figure; we didn't expect such a contraction on the electronics side," an economist with DBS economic-market research, Chua Hak Bin, told AFP.
"It suggests to us that the electronics recovery is a bit more patchy than what we thought. This, however, mirrors similar electronics slowdowns in Taiwan and (South) Korea."
Exports of electronics products, which make up nearly half of total shipments, fell 4.5 percent year-on-year in May to 5.08 billion Singapore dollars (3.1 billion US), compared with 5.6 percent growth in April.
International Enterprise Singapore said the decline in electronics was partly due to a contraction in exports of semiconductor chips, especially to Europe, Hong Kong and Japan, with shipments down 21.7 percent.
A fall in disk drives to Thailand and Malaysia and personal computer parts to the United States were also important factors.
The agency said the decline in exports was evident in the non-electronic as well as electronic sectors, and could be attributed to the high comparative base 12 months earlier. NODX grew 27.7 percent year-on-year in May 2004.
"The high base-effect exacerbated weakness in exports to key markets such as the US, EU, Japan, Hong Kong and (South) Korea," the agency said.
"In the meantime, China and Taiwan were the top two NODX growth contributors for the month."
The non-electronic sector contracted 6.6 percent in May, with pharmaceutical exports down 23.2 percent.
International Enterprise Singapore said the last time NODX contracted was 35 months ago.
After recording stellar growth of 8.4 percent in 2004, Singapore's economy has been slowing faster-than-expected all year.
The government had initially forecast Singapore's economy would expand 3.0-5.0 percent this year but slashed that to 2.5-4.5 percent after a weaker-than-expected performance in the first quarter.
Singapore's economy grew just 2.5 percent in the first quarter from a year ago, much slower than the 6.5 percent expansion registered in the final three months of 2004 and at the weakest rate since the third quarter of 2003.
Private sector economists polled by the Monetary Authority of Singapore last month also shaved their forecast for Singapore's economic growth this year to 3.8 percent from 4.3 percent.
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