Six economists surveyed by Reuters forecast that non-oil domestic exports probably declined a seasonally adjusted 0.2 per cent in July from June, when exports rose 4.2 per cent after a sharp fall in May.

From a year earlier, July non-oil domestic exports are expected to decline by 5.3 per cent after a 10.5 per cent contraction the previous month, the poll of 10 economists shows.

Earlier this week, the trade-dependent country's trade agency slashed its exports forecast, saying it expected exports to shrink by 2-4 percent this year rather than to grow at that pace.

It would be the first decline in annual exports since 2001.

'The expected July contraction would represent the third consecutive month of double digit decline...as the export sector reels from the impact of slower global demand and a relatively strong Singapore dollar,' Mr Alwin Liew, an economist at Standard Chartered, said in a note to investors.

Singapore's heavy dependence on trade makes the $160 billion (S$226 billion) economy a good gauge of how the global slowdown is affecting Asia. Non-oil domestic exports to the United States fell 21 per cent in the second quarter, while shipments to European Union dropped by 12 per cent.

'July may see some moderation in the year-on-year declines, but the general outlook remains bearish,' said Ms Selena Ling at OCBC Bank.

She said there were hardly any signs of near-term impetus for exports to pick up given that the economies of the euro zone and Japan have contracted in the second quarter.

Singapore's economy contracted in the second quarter underscoring that growth in Asia is becoming a bigger worry than inflation for policymakers and investors. -- REUTERS