SINGAPORE Singapore's exports in September slid less than expected as shipments to top customer China declined at a slower pace and sales to Europe rebounded, but the outlook for the trade-dependent economy remained grim.
Shipments to the United States recoiled sharply from gains the previous month, while sales of electronics continued to slump despite heading into peak year-end shopping season.
Non-oil domestic exports (NODX) fell 4.8 percent last month from a year earlier, the trade agency International Enterprise Singapore said in a statement on Monday.
That was slightly better than the median forecast of a 6.0 percent slump in a Reuters poll. In August, the city-state's overseas shipments stalled.
On a month-on-month, seasonally adjusted basis, exports grew 2.4 percent in September, beating a forecast of a 1.5 percent rise in the survey.
"We expect Singapore NODX to stabilize in the coming months on a year-on-year basis. But the recovery is expected to be modest given still weak external demand," said Trinh Nguyen, senior economist for Natixis in Hong Kong.
"Given the spillover of the trade sector into services lately, the MAS does not want to cause significant depreciation expectations of the Singapore dollar, which will cause domestic interest rates to rise too fast," Nguyen said, referring to the Monetary Authority of Singapore.
The central bank on Friday held policy steady despite a surprisingly sharp economic contraction in the third quarter, but analysts say the weak outlook for inflation and growth will likely force policymakers to ease further.
Exports to China fell 2.2 percent in September from a year earlier, compared with a 5.4 percent slump in August.
China's exports in September fell more than forecast while imports unexpectedly shrank, indicating signs of stabilization in the world's second-largest economy may be short-lived.
"The bigger picture remains that particularly given that China's export falls were very unexpectedly weaker, the sense is that this is going to set the stage for a rather wobbly and fragile coming months," said Vishnu Varathan, senior economist for Mizuho Bank in Singapore.
Sales to the European Union expanded 9.9 percent last month from a year earlier, compared with a 15.6 percent decline in August.
But shipments to the United States shrank 7.2 percent in September on-year, after rising 4.8 percent in August.
Declining U.S. demand for aircraft parts, integrated circuits (ICs) and non-electric engines and motors all dragged on exports to the world's top economy.
By product, volatile pharmaceutical exports increased 16.2 percent, compared to a 17.9 percent decline in the previous month.
Total electronics exports in September shrank 6.6 percent from a year earlier after falling 6.0 percent in August.
Activity at the local factories expanded in September for the first time in 15 months as new orders rose, a survey showed earlier this month.
(Reporting by Jongwoo Cheon; Additional reporting by Anshuman Daga; Editing by Kim Coghill)