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Weak Global Economy May Cripple Singapore Trade Growth: IE Singapore

Weak Global Economy May Cripple Singapore Trade Growth: IE Singapore

Slow growth in advanced economies, particularly the U.S. and the Eurozone, is likely to act as a drag on Singapore's trade growth in 2013, International Enterprise (IE) Singapore said Friday. Total trade is projected to grow moderately between 3 percent and 5 percent in 2013.

At the same time, the growth estimate for 2012 has been revised down to 3-4 percent from previous forecast of 4-5 percent growth.

The non-oil domestic exports, or NODX, is expected to grow 2-4 percent in 2013 following an estimated 2-3 percent increase this year. IE Singapore had earlier forecast the NODX growth for 2012 at 4-5 percent.

These projections take into account the uncertainties surrounding the global outlook, slowing growth of the US economy, the continued weakness in Eurozone economy as well as the moderate growth in Asian economies.

According to the trade promotion agency, possible downside risks include the looming US 'fiscal cliff' and further slowdown in the Eurozone economy. "Should any of these risks occur, Singapore's trade forecast would be lowered," it said.

Revised estimates released by the Ministry of Trade and Industry showed Friday that the gross domestic product contracted a seasonally adjusted 5.9 percent in the third quarter compared to the previous three months.

The Ministry said growth in externally-oriented clusters such as electronics manufacturing will remain subdued, given the weak external demand. It expects the Singapore economy to grow 1.5 percent in 2012 and 1-3 percent in 2013.

NODX contracted 3.2 percent year-on-year in the third quarter, in contrast to the previous quarter's 3.7 percent growth. Non-oil shipments rose 7.9 percent year-on-year in October following a 3.6 percent decrease in September. Economists had forecast a 3.1 percent growth. The uptick was led by accelerated growth in non-electronic exports.

Exports of non-electronic products rose 12.7 percent year-on-year in October, faster than the 3.9 percent increase in the previous month. Electronic product shipments contracted 0.8 percent after 16.6 percent decline in September.

NODX to all of the top 10 markets, except Malaysia and South Korea, rose in October. The top three contributors to NODX during the month were the US, Hong Kong and the EU 27.

by RTT Staff Writer

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