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Singapore key exports fall at slower pace in May: govt

AFP - Thursday, June 18

SINGAPORE (AFP) - - Singapore said Wednesday the decline in its exports eased in May, raising hopes that demand for goods from the export-dependent economy may have bottomed out.

However, the good news was tempered by the fact that the figures were buoyed by the volatile pharmaceuticals sector, while the island-state's other main exports continued to plummet.

Non-oil domestic exports (NODX) were 12.1 percent lower year on year.

The figure was slower than the 19.2 percent fall recorded in April and the 17.3 percent drop in March, according to the data released by International Enterprise (IE) Singapore, the government's trade promotion body.

It was also better than the 16.6 percent drop expected in a Dow Jones Newswires poll of analysts.

On a seasonally adjusted basis, NODX rose 5.6 percent month on month in May following a 1.4 percent drop in April, IE Singapore said.

The decline in May exports was the 13th consecutive month of contraction for the economy, which fell into recession in the third quarter of last year as it was hit by the global economic and financial crisis.

Total NODX for May was 10.94 billion Singapore dollars (7.51 billion US) and total trade fell 26.7 percent to 57.63 billion dollars from a year ago.

NODX is one of the leading indicators closely watched for the state of the Singapore economy which is heavily dependent on exports, especially to the United States, Japan and other major economies.

David Cohen, an economist with research house Action Economics, said the latest data indicate the plunge in demand for Singapore and other Asian exports has reached bottom.

"Putting it together, it's more or less consistent with the sense that the fall in global demand has bottomed out," he said.

But he cautioned that "the big question mark now is while the global demand seems to have bottomed out it remains to be seen how strong the recovery will be."

Singapore is the most export-dependent economy compared with other Asian nations such as Taiwan and South Korea, said Cohen.

Unlike its bigger rivals, Singapore does not have a domestic market big enough to cushion the impact of falling shipments.

Economist Song Seng Sun of CIMB-GK brokerage said the latest export numbers was boosted largely by the volatile pharmaceuticals sector.

Pharmaceuticals rose 40.2 percent to 1.53 billion dollars, while electronics exports fell 21.8 percent to 3.89 billion dollars and petrochemicals slumped 37.1 percent to 669 million dollars.

"Put aside pharma and the picture isn't that great as the headline numbers suggest," said Song.

A low base in May 2008 also magnified the improvement in May this year, Song added.

"There's no firm indication that we are going to see a sustainable recovery. If we take out pharmaceuticals, the underlying economy is not as robust," he said.

Shipments to Singapore's top ten export markets all tumbled in May with the exception of Taiwan and South Korea, IE Singapore said.

NODX to the United States fell the steepest by 35.2 percent, followed by Japan at 29.2 percent and then Malaysia by 22.9 percent, it said.

Exports to the European Union sank 9.6 percent and shipments to China were down 17.8 percent.

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