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Singapore’s GDP likely to contract in 2016

Non-oil domestic exports for November in Singapore scaled down by 3.3% y/y, which is lower than markets' expectation. The non-oil domestic exports remained steady at 2.1% in October. On a month on month basis, the seasonally adjusted exports figures dropped by 3.8% against 0.3% in October.

The unexpected fall in exports was due to sharp contraction in non-electronics exports, which was reduced by 5.1% year on year. Weaker external demand caused the exports of Singapore to mire below expectation.

 "The release reaffirms our view that headwinds of persistently weak external demand and slower inventory adjustment are likely to keep growth momentum subdued into 2016. The moderate external growth outlook is also consistent with the Ministry of Trade and Industry's assessment of domestic growth remaining resilient amid a challenging external environment. The MTI expects growth to be close to 2.0% for 2015 and 1-3% in 2016 in the absence of a meaningful external uplift", says Barclays in a research note.

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