Singapore monetary easing bets rise on gloomy export data
* Non-oil exports fall 15.9% yr/yr in May
* Latest sign of struggling economy
* Economists raise chance of policy easing in October
(Updates with analyst comments, background)
By Fathin Ungku
SINGAPORE, June 17 (Reuters) - Singapore's non-oil domestic
exports (NODX) declined the most in more than three years in May
due to a slump in shipments to China, data showed on Monday,
prompting economists to raise bets on the prospect of monetary
easing later this year.
NODX fell 15.9% year-on-year in May, the biggest decline
since March 2016, and the latest sign the city-state's economy
is struggling in the wake of tepid global growth and a simmering
U.S.-China trade dispute.
The drop was slightly smaller than the 16.5% decline
predicted by economists in a Reuters poll, but more than the 10%
fall seen in April.
On a month-on-month, seasonally adjusted basis, exports grew
6.2%, accelerating from the 0.6% decline the month before, data
from the trade agency Enterprise Singapore showed. This was
better than the 4.9% increase predicted by economists.
The Monetary Authority of Singapore (MAS) holds its next
policy meeting in October.
"The outlook for exports has deteriorated further following
more tariff hikes by both the US and China," said Sian Fenner
at Oxford Economics.
"Against this backdrop we look for the MAS to ease monetary
policy at its bi-annual October meeting."
Nomura, in a note to clients, said it expected the MAS to
keep its policy stance unchanged in October but added that
recent data meant "the risk of an easing is rising".
GROWTH FORECAST CUT
Last month Singapore cut its 2019 economic growth forecast
to 1.5%-2.5% after expansion fell to its lowest in a decade in
the first quarter, hit by a contraction in manufacturing in the
wake of the China-U.S. trade dispute.
Jeff Ng, an economist at Continuum Economics, noted that
Singapore mostly exports finished products to China, and
presently Chinese demand for such products was low.
"(Trade tensions) certainly affected confidence. It's not
necessarily the main determinant of weaker growth, but it has
affected businesses confidence," he said.
Ng said the MAS could ease monetary policy "off-cycle" if
economic growth continues to slow or if the U.S. cuts its
Singapore manages monetary policy by letting the Singapore
dollar rise or fall against the currencies of its main trading
partners within an undisclosed policy band.
The MAS tightened monetary policy twice last year in efforts
to control rising price pressures and strengthen its currency -
its first such tightening moves in six years.
(Reporting by Fathin Ungku and Joe Brock; Editing by Simon
First Published: 2019-06-17 04:01:59
Updated 2019-06-17 08:55:35
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