Singapore July exports remain weak, add to concerns of slowdown this year

Singapore exports fell more than expected in July fuelling concerns regarding an economic slowdown this year. Data released by Singapore government's trade promotion body International Enterprise on Wednesday showed that July non-oil domestic exports was much weaker than expected at -10.6 percent y/y, worse than the -2.4 percent drop in the previous month. For the first seven months, it has dropped 4.7 percent vs flat growth in 2015.

Singapore's economy grew a modest 2.0 percent in 2015, the weakest rate of expansion since 2009 due to the effects of a global financial crisis. Data reinforces the growth outlook with exports remaining a drag. The government recently narrowed its growth projection for 2016 to 1-2 percent from 1-3 percent previously over concerns regarding the weaker global economic outlook.

The "slowdown in China is the main concern but sluggish growth in the US and uncertainties surrounding the Eurozone are not helping," said DBS Bank senior economist Irvin Seah. Details of the report showed that exports to China, Singapore's top overseas market, fell 16.6 percent in July from a year earlier, much more than a 9.9 percent decline in June.

There are limited implications for MAS policy however with recent comments from officials that the neutral stance is expected to remain for the rest of the year. For USD-SGD, it eased back to 1.3347 on Tuesday and was trading 0.38 percent higher on the day at around 1.3445 at 09:00 GMT.