(Updates with economist comments, details)
SINGAPORE, Dec 17 (Reuters) - Singapore’s exports slipped in November as shipments dropped to key markets from the United States to China, leading economists to expect a recession to continue in the fourth quarter for the trade-dependent country.
November’s 2.8 percent fall after seasonal adjustments in non-oil domestic exports followed a revised 7.5 percent drop in October, amid a weakening global economy that pushed the country into its first recession in six years in the third quarter.
“It’s just further evidence that the contraction in global export demand is impacting Singapore. For the fourth quarter we’ll probably have another quarter-on-quarter contraction,” said David Cohen of Action Economics.
The poor economic performance has led some economists to predict a monetary policy move before the central bank’s next official meeting in April, and following an aggressive U.S. rate cut on Tuesday that is boosting Asian currencies [EMRG/FRX].
The Singapore dollar SGD=D3, which the central bank uses as its main monetary policy tool by managing it against a secret basket of currencies, weakened slightly to 1.4567 versus the U.S. dollar, from 1.4546 before the data. The central bank eased policy to zero appreciation for the currency in October.
Non-oil exports in November fell 17.5 percent from a year earlier to S$12.06 billion ($8.22 billion), trade agency International Enterprise Singapore said in a statement on Wednesday.
“This was the steepest contraction since Feb 2002. Every aspect of non-oil exports contributed to the dismal performance,” said Alvin Liew, economist at Standard Chartered.
Electronics exports fell 17.3 percent from a year earlier while pharmaceuticals slumped 48.1 percent.
Exports to the United States and Europe slid 27 percent and 26 percent respectively from a year earlier, while similar double-digit declines were seen to the country’s key Asian export markets such as China and Malaysia.
“The poor export performance is likely a prelude to terrible Singapore manufacturing data for the month of Nov, and the heavy drag of a contracting manufacturing output is likely to see Singapore miss its full-year GDP forecast of 2.5 percent,” Liew added.
Singapore’s non-oil domestic exports were worth about 70 percent of the country’s gross domestic product last year.
Singapore’s trade minister said on Tuesday the country could miss a forecast of 2.5 percent for full year economic growth, after a worsening of the global economy in the fourth quarter.
The government has said it will bring forward the budget by one month to January and has vowed to ramp up spending, to help boost an economy it says could shrink in 2009.
Singapore’s non-oil domestic exports, which comprise of goods that have been made in Singapore or undergone further processing, include mobile phones, medical instruments, and active ingredients for some blockbuster drugs. (Additional reporting by Matthew Webster, Laurence Tan and Vidya Ranganathan; Editing by Kazunori Takada)
Our Standards: The Thomson Reuters Trust Principles.