Singapore’s exports skidded in June as shipments to China and Europe continued to contract, suggesting the trade-reliant economy may need more stimulus to support a fragile recovery in the face of weak global demand and concerns over Brexit.
Non-oil domestic exports (NODX) fell 2.3 percent last month from a year earlier, the trade agency International Enterprise Singapore said in a statement on Monday. That was slightly better than the median forecast of a 3.0 percent fall in a Reuters poll.
In May, NODX unexpectedly jumped on gold and pharmaceuticals shipments.
On a month-on-month, seasonally adjusted basis, NODX tumbled 12.9 percent in June, IE Singapore said, below a forecast of a 10.3 percent contraction.
The downturn in exports mirror Singapore’s weak container volumes, which fell 5.2 percent in the first half of 2016 from a year earlier with some container yards empty.
The city-state’s economy grew slower-than-expected in the second quarter, keeping pressure on the central bank to further ease policy in the face of sluggish global demand and concerns over Brexit.
Exports to China, Singapore’s top overseas market, fell 9.9 percent in June from a year earlier. That compared to a 10.1 percent decline in May.
“Singapore’s exports to China continued to decline, underscoring Singapore’s vulnerability to the waning momentum of the Chinese economy,” said Weiwen Ng, an economist for ANZ in Singapore.
China’s economy in April-June period expanded slightly faster but worries persist about the outlook in the world’s second-largest economy.
Sales to the European Union slumped 5.8 percent in June on-year after a 14.0 percent contraction in May, and there are worries Brexit could further impact sales.
The International Monetary Fund earlier this month cut its euro zone growth outlook for the next two years and warned that the conditions could worsen if Britain’s decision to leave the EU continues to spread turmoil in financial markets.
The EU is Singapore’s second-largest NODX market.
Shipments to the United States rose 5.9 percent last month from a year earlier, but that was slower than the 9.1 percent growth seen in May.
Electronics exports slipped 1.7 percent in June on year.
Singapore’s electronics sector has been underperforming neighbours such as South Korea and Taiwan due to cut-throat competition, as well as the city-state’s lack of popular high-tech products such as smartphones.