Cablegate: Singapore Exports Continue to Slide

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ZNR UUUUU ZZH
R 191002Z DEC 08
FM AMEMBASSY SINGAPORE
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UNCLAS SINGAPORE 001325

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E.O. 12958: N/A
TAGS: ECON ETRD SN

SUBJECT: SINGAPORE EXPORTS CONTINUE TO SLIDE

REF: SINGAPORE 1242

1. The GOS released export statistics for November showing a 17.5
percent year-on-year decline in non-oil domestic exports (NODX),
continuing a now seven-month decline (see reftel). The drop was
larger than market expectations of a 14.5 percent fall, and
represented the worst monthly performance since 2002. Electronics
exports, which make up 40 percent of NODX, were off 17.3 percent,
part of a steady decline that has lasted nearly two years.
Pharmaceutical exports were off 48 percent, the largest monthly drop
since the pharmaceutical series began to be recorded in 2003. The
remainder of Singapore's non-oil exports was off ten percent.
Analysts tempered the news by noting that services exports are not
included in the official statistics, and that while the value of
exports has declined sharply, overall volumes have declined less
so.

2. Singapore's top ten NODX markets were all in decline,
particularly the E.U., United States and China, which sank nearly 30
percent for the month. Exports to other Asian economies dropped an
average of 20 percent. Singapore's efforts to diversify export
markets may be paying off as NODX to emerging economies jumped 41
percent in November, primarily to Latin America. Latin America is
the destination for approximately four percent of Singapore's
exports.

3. The results led some local analysts to continue their gloomy
forecasts, predicting the fourth quarter will continue the negative
growth seen in the previous two quarters. HSBC Bank's analyst
suspects that the collapse in exports may push the Monetary
Authority of Singapore to weaken the Singapore dollar further.
However, she cautions that the decline in exports has more to do
with the collapse in external demand than uncompetitive pricing, and
the MAS will have little influence to improve matters.
HERBOLD

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