Singapore exports fell more than expected in December as a slump in sales to China deepened, adding to worries that global headwinds will keep the trade-dependent economy on a wobbly footing this year.
The data could revive expectations that the central bank will ease its monetary policy again in April or in an off-cycle move before that, especially as oil prices continue to tumble.
Non-oil domestic exports (NODX) slid 7.2% in December from a year earlier, trade agency International Enterprise Singapore said in a statement on Monday, missing the median forecast of a 5.1% contraction in a Reuters poll.
That compared with a 3.4% contraction in November.
On a month-on-month seasonally-adjusted basis, non-oil domestic exports fell 3.1% in December, worse than the forecast for steady shipments.
“Today’s NODX print reinforced our view that risks to the growth outlook is clearly skewed to the downside and could possibly elicit a further calibration in policy settings,” said Weiwen Ng, an ANZ economist in Singapore.
Concerns about the global economy have heightened in recent weeks as crude prices continued to tumble amid concerns about ebbing demand and a supply glut. A broader rout in commodities have also rocked financial markets worried about a slowing global economy.
Most economists say the city-state’s central bank is unlikely to deliver a surprise off-cycle easing similar to the one in January last year, but a few see risks of monetary stimulus if oil prices fall more sharply or China’s economy takes a turn for the worse.
Selena Ling, head of treasury and research strategy for OCBC Bank, said the key will be whether MAS sees the drop in oil prices as a temporary phenomenon or a structural shift.
“That will be key, the game changer. I think the slow growth story is pretty much priced in,” she said.
Sales to China, Singapore’s top overseas market, decreased 18.7% in December from a year earlier, compared to a 9.1% slide in November.
Shipments to the European Union declined 2.9% last month, but those to the United States rose 12.8%, picking up from a 10.8% gain in November.
Annual domestic exports of electronics eased 0.3%, while volatile exports of pharmaceuticals fell 9.9% in December from a year earlier.
Singapore’s electronics sector has been underperforming neighbours such as South Korea and Taiwan due to fierce competition and the city state’s lack of popular high-tech products such as smartphones.
— By Jongwoo Cheon & Masayuki Kitano