“The region outside of Singapore had a very rough month in January and we doubt this will mark the bottom,” said one economist.
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Singapore’s non-oil domestic exports fell 25% year-on-year in January – the biggest drop in 10 years.
government data shows that Singapore’s non-oil exports to top markets led to a larger decline, with exports to China down more than 41 percent, to the US down 31.5 percent and to Hong Kong by more than 55 percent on the month. .
The data marked the fourth consecutive decline and the steepest decline since February 2013, when the economy saw a contraction of more than 30%.
Retained non-oil exports also fell 10.4% in January, following a 7.2% decline in December. Total trade also fell 10.4% year-on-year, with total exports down 9. .6% and imports down 11.3%.
The Singapore Dollar weakened slightly after release and Straits Times Index traded slightly higher in Friday morning trading.
Disappointing trade data comes days after Singapore releases latest data budget for the year. Finance Minister and Deputy Prime Minister Lawrence Wong told CNBC in a exclusive interview that the government has struggled to strike a “delicate balancing act” between tackling inflation and ensuring fiscal prudence.
Oxford Economics senior economist Alex Holmes called the January trade data “alarming”.
“The region outside of Singapore had another very difficult month in January, and we suspect this marks a bottom,” he said in a Friday note.
“The worst may not be over yet for Singapore’s export sector. We continue to anticipate a further decline in global demand,” he said, reiterating the company’s prediction that there will be a recession. recession in the first half of this year and added that it will continue. to weigh in on Singapore’s trade prospects.
Exports drag down growth
Oxford Economics expects Singapore’s economy to grow slightly by 0.7% for the full year.
“The weakness in trade is the main reason why we expect GDP growth to be near the low end of the government’s 0.5-2.5% forecast for 2023,” he said.
He noted that the value of exports of domestically produced chips has fallen below the lows seen in the early stages of the pandemic and that the “shift in the semiconductor cycle” is continuing to hurt exports.
“A drop in export earnings could also hit domestic demand, stalling business investment and job growth,” he said.
— CNBC’s Lim Hui Jie contributed to this report.
