SINGAPORE - It is the first major piece of economic data released this year - and it disappointed. Singapore's non-oil domestic exports (NODX) slid 9.9 per cent from the same month a year ago, official figures showed on Wednesday (Feb 17).
This was sharply off economists' estimates of a 7.5 to 7.6 per cent fall.
Here's what some economists have to say:
DBS economist Irvin Seah: Rcession threat
It certainly spells bad news on this small and open economy. Plainly, global outlook has worsened. A tepid growth momentum in the US and the sharp deceleration in China are weighing down on growth prospects.
Moreover, NODXs to key Northeast Asia economies such as China, Taiwan and Korea have fallen sharply (-18.7%, -17.1% and -25.8% respectively). And China is the largest export market for these countries, including Singapore. Hence, the impact from the slowdown in China could potentially be more broad-based than what many had previously expected.
Today's NODX will add on to the growing list of dire economic data. If such trend persists, recession will become a real threat.
ANZ economists Ng Weiwen & Glenn Maguire: Stuck in a rut
Singapore's non-oil domestic exports have not found a footing. This is not surprising, given the regional trade recession and distortions traditionally associated with the Lunar New Year period.
As we usher in the year of the Fire Monkey, Singapore needs to be nimble and versatile - qualities of the monkey - to navigate the new global trade (ab)normal.
Specifically, Singapore must leverage on the rising tide of services trade. Any positive impetus from the merchandise trade channel will be marginal, given the secular shift towards services in both the US and China which translates into lower merchandise imports from traditional partners.
The reconfiguration of regional supply chains - with China embracing vertical integration - will be an ongoing negative for merchandise trade.
The ongoing trade recession has had already a knock on impact on externally-oriented sectors and we are pencilling in significant downward revision in the final estimate of Q4 GDP due later in February.
UOB economist Francis Tan: Monetary stimulus could follow
Although January NODX remained weak, we are optimistic on NODX for February, largely due to the low base effects (NODX contracted 11.7 per cent, year-on-year in Feb 2015).
However, this is no cause for cheers and certainly does not signal a turnaround in NODX yet. In fact, NODX performance in the first half of 2016 is likely to remain weak. We are expecting NODX to contract 1.1 per cent in the first half-year, year-on-year. Our
Our forecast for GDP growth in the first quarter remains at a weak 1.9 per cent yoy compared to 2.7 per cent for the same period a year ago, due in part to the continued contraction in the manufacturing sector as global demand wanes.
The key question now is whether there could be some form of monetary stimulus from the central bank.
We maintain our NODX growth forecast for full-year 2016 at 2.1 per cent, with most of the improvement taking place in the second half-year.
However, there could be downside risks to our forecast should the uncertainties in China's growth and oil prices perpetuate.