NODX dropped by 11 per cent in May 2008, reversing the 5.3 per cent growth in April 2008, due to a fall in both electronic and non-electronic NODX. (Source: IE Singapore Press Release)
Electronic export shrank 8.5% overall, with semiconductors dropping 12.6% and consumer electronics dropping 30.6%. In the case of non-electronic export, pharmaceuticals dropped 48.5%. Pharmaceutical as an export sector is not immune from the global slowdown in economic growth. (Source: The Straits Times, 18 June 2008)
This was to be expected since industrial production declined a sharp 5.7% in April 2008. Manufacturers were cutting back on production in anticipation of lower exports. This decline in industrial production was the largest drop in 10 months with both electronics and pharmaceuticals suffered declines. (Source: The Straits Times, 27 May 2008)
Singapore being an export-led economy, will be affected by declines in exports. One reason for a drop in export can be due to our strong Singapore dollar vis-à-vis other importing countries, such as US thus making our exports expensive in US.
The question now is how MAS will manage the exchange rates of Singapore dollar against a trade-weighted basket of foreign currencies. Should MAS continue the stance of strong Singapore dollar to fight imported inflation or to moderate the rise in Singapore dollar in order to make our exports more competitive against other exporting nations, such as Taiwan and South Korea (in the electronic sector)?
Written on 6/18/2008 9:48 AM
Copyright © 2008, the author known as LKT in Singapore.
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