S'pore's Export Growth Slowed To 2.3% In 2007, Surprising Experts

Source : The Straits Times, Jan 17, 2008

SINGAPORE'S export growth slowed to 2.3 per cent last year, missing official targets as overseas sales of goods made here contracted last month.

Non-oil domestic exports (Nodx) shrank 4.5 per cent in December, dragged down by lower exports of semiconductors, telecoms equipment and computer disk drives.

December's dismal showing caught economists, who had expected positive growth, by surprise. It also capped a lacklustre year for Singapore exports, which came in well-under the Government's 4 to 6 per cent forecast.

Still, the government trade promotion body, International Enterprise Singapore (IE Singapore) expects things to turn around this year, repeating a 4 to 6 per cent forecast for Nodx.

While the trade agency expects the global economy to slow, it believes a long-overdue technology recovery will provide enough boost to achieve its target, though economists say this appears to be optimistic at best.

Total trade is projected to grow between six and eight per cent this year, which is slower than the five to seven per cent expected, said IE Singapore .

'The main downside risks to the trade outlook for 2008 include a hard landing of the US economy, continued weakness in semiconductor prices and persistently high and volatile oil prices,' IE Singapore said.

'Even though Singapore has diversified by reducing its reliance on the US and exporting more to the regional markets, a sharper-than-expected US slowdown is likely to have a large negative impact on our exports as much of the final demand still comes from the US.'

Analysts fear the US economy, the biggest in the world, is heading for a recession due partly to a mortgage default crisis.

Singapore's trade-reliant economy was valued at $210 billion at the end of 2006.