Singapore sees sharpest export drop in six years

Singapore sees sharpest export drop in six years

18/07/19

Chern Han Mah, Business and Policy Intern

Data released by Enterprise Singapore has revealed that total non-oil exports slumped 17.3 per cent in June, as regional trade tensions continue to cause disruption. This represents the biggest drop in exports since February 2013.

Singapore’s total trade fell by 7.2 per cent – the fourth straight month of export contraction, and sharply below analysts’ expectations.

The weakness in exports was largely due to the electronics sector, which suffered a 31.9 per cent fall in exports following a 31.6 per cent fall the month before. Electronics, which comprises around 25 per cent of Singapore’s non-oil exports, have been affected by the ongoing spat between South Korea and Japan, where the latter has restricted exports of raw materials used in chip manufacturing.

According to the South China Morning Post, non-oil exports from Singapore to China fell by 15.8 per cent while those to Hong Kong fell 38.2 per cent, accelerating declines seen in May. This provides further evidence of a regional slump in trade as part of the knock-on effects of the US-China trade war.

Analysts told the Straits Times that Singapore’s second quarter growth – which came in at 0.1 per cent, foreshadows weaker-than-expected trade and manufacturing numbers. Such numbers indicate that a recovery in the second half of the year will not materialise and that a further decline in exports is likely. This has prompted the International Monetary Fund to cut Singapore’s growth forecast for the year to 2 per cent from 2.3 per cent.

The ongoing disruption to global trade will be one of the themes discussed at the Asia House Global Trade Dialogue, taking place in Singapore on 7 November 2019. 

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