Non-oil exports from Singapore plunged down by 21% in December 2008 due to low demand, especially of electronics, from the key markets struggling with financial crisis.
The Trade and Industry Ministry of Singapore said that non-oil exports from the country, accounting for two-third of its GDP, declined in December 2008, indicating that the country has been gripped by the worst economic recession for decades, as reported by Associated Press.
Singapore’s non-oil exports plummeted 21% to SG$ 10.5 Billion ($7.0 Billion) in December 2008 on a YOY basis. In the same month, the exports saw a monthly decline of 13%, far ahead of the expected fall of 4.5%. Earlier, exports plunged by 2.8% in November 2008.
The drop, in terms of products, was headed by the electronic products that registered a YOY decline of 25.4% in December 2008 whereas there was a decline of 51.1% in the pharmaceutical exports. Meanwhile, in regional terms, Singapore’s exports to EU and the US slumped by 34% and 24% respectively.
The decline in Singaporean exports stemmed from reduction in electronics demand from major overseas markets like Europe and the US. Like other Asian countries, the export industry of Singapore depends on the demand from the rest of the world. However, due to weak consumer confidence in major developed economies hit by the worst economic turmoil in 80 years, the demand has dropped significantly.
This poor performance has prompted some economists to expect relaxation in monetary policy before the next official meeting of the central bank in April 2009. The bank manages Singaporean dollar against some of the world currencies, thereby using it as a prime tool in regulating its monetary policy.
The decline in Singapore’s exports has become a constant trend in past few months, as evident from the YOY decrease of 18% and 15% in November and October 2008 respectively. Moreover, there are only a few signs of recovery from the present situation as the demand from key markets seems unlikely to pick up in near future.
According to a Research Analyst at RNCOS, “The negative economic conditions prevailing in the export market have left the Singapore’s non-oil export industry to suffer. Weak demand from overseas markets will certainly put adverse impact on the manufacturing sector of the island state.”
