Singapore's non-oil exports grew unexpectedly in December as an expansion in non-electronic shipments, led by pharmaceuticals, offset a contraction in overseas demand for its electronic products.
Non-oil domestic exports (NODX) rose 9 percent year-on-year in December against economists' expectations for a 1.2 percent contraction, according to data published by IE Singapore on Tuesday. This followed a 1.4 percent increase in shipments in the previous month.
On a month-on-month seasonally adjusted basis, NODX grew 16 percent, following the previous month's 5.8 percent expansion, due to the rise in non-electronic NODX.
Annually, non-electronic exports expanded 17 percent in December, following the 2.2 percent increase in the previous month. The increase in non-electronic shipments was led by overseas sales of structures of ships and boats, pharmaceuticals and printed matter, the trade promotion agency said.
Shipments of pharmaceuticals were 39 percent higher than December 2010. At the same time, electronic exports contracted 4.6 percent year-on-year, in contrast to the previous month's marginal 0.1 percent growth.
Compared to December 2010, exports to the European Union, Japan, South Korea, Malaysia and Taiwan expanded, while NODX to Hong Kong, Indonesia, the US, Thailand and China decreased.
Exports to the EU 27 rebounded strongly to grow 12 percent year-on-year in December after a 20 percent contraction in November. South Korea also saw a robust expansion of 30.6 percent during the month after a 2.1 percent decline in November.
Exports to Japan expanded at a faster pace of 26.5 percent from last year. China demand shrank 1.4 percent, while exports to the US declined 4.2 percent.
Earlier this month, Finance Minister Tharman Shanmugaratnam said the country may enter a period of sub-par growth for at least two years. Prime Minister Lee Hsien Loong has also warned that the small and open economy of Singapore will inevitably be affected by external uncertainties and debt problems in Europe.
The Singapore economy contracted 4.9 percent in the fourth quarter of 2011 compared to the previous three months, according to advance estimates released by the Ministry of Trade and Industry earlier this month. The economy grew 1.5 percent in the third quarter.
Manufacturing was the key drag, plummeting 21.7 percent on quarter. For all of 2011, GDP was up 4.8 percent, roughly in line with the government's growth forecast of 5 percent. In October, the Monetary Authority of Singapore loosened its policy stance amid weak growth outlook, by lowering the slope of the policy band, in turn allowing the Singapore dollar to appreciate at a slower pace.
In its Financial Stability Review released last month, the central bank said it expects economic growth to slow to below its potential rate of 3-5 percent in 2012.
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