EXPORTS shot ahead last month with shipments to Europe rocketing up 75 per cent over the same period last month, despite the debt crisis in the region rocking global markets.
All of Singapore's top 10 destinations took in more exports in June, giving the sector an overall increase of 29 per cent for the month - eclipsing economists' tips of a 23 per cent rise.
A boost in pharmaceutical shipments helped to magnify figures compared to a low base last year, said Barclays Capital economist Leong Wai Ho.
Exports to Europe also rose because they are 'headed largely for the core European markets of Germany, the Netherlands and France, which have been less affected by problems in southern Europe', he added.
Aside from Europe, exports to China grew 39 per cent last month from the year before, following a 64 per cent rise in May, while exports to Japan jumped 50 per cent, according to IE Singapore figures yesterday.
Electronics exports continued to expand, rising 44 per cent last month, while non-electronics products, which include pharmaceuticals, grew 21 per cent over the same month last year.
'China's trading partners are expected to benefit from the strong performance of Chinese imports. Imports of our major Asian trading partners, for example, Indonesia and Malaysia, also grew...This has had a positive impact on Singapore's exports,' said IE Singapore yesterday.
'Global semiconductor sales are expected to grow at a much faster pace than in 2009,' it added.
The June numbers have rounded out the second quarter, which had overall export growth of 28per cent over the same three months last year.
Such robust numbers have led to a rethink on Singapore's growth prospects.
The Government, citing the stronger-than-expected trade expansion in the second quarter, buoyant demand from Asia and a continued boom in the semiconductor industry, has revised its forecast for non-oil domestic exports growth this year to 17 to 19 per cent, up from a 15 to 17 per cent prediction.
Total trade growth this year has also been revised upwards from between 14 and 16 per cent to 17 to 19 per cent.
But economists warn that export momentum appears to have reached a peak and is due for a slowdown in the second half of the year.
Month-on-month seasonally adjusted figures have decreased marginally for the second straight month, while the pace of growth in electronics has also slowed.
Non-oil domestic exports last month fell 0.1 per cent from May, following a 0.2 per cent fall in May from April.
Electronics shipments last month grew 1.7 per cent from May, compared to a 13.7 per cent jump from April to May.
'Easing momentum was also seen in other trade components, such as non-oil re-exports and non-oil retained imports of intermediate goods,' said Citigroup economist Kit Wei Zheng.
HSBC economist Frederic Neumann said that since Singapore is coming from a very high export level, a 'cool-down does not in itself imply a hard landing'.
Some economists also expect lingering debt problems in Europe to gather pace over the rest of the year.
The Ministry of Trade and Industry said that fiscal austerity measures in some European economies and the weakening of the euro could further weaken domestic demand in Europe.
BENEFITS FROM CHINA
'China's trading partners are expected to benefit from the strong performance of Chinese imports. Imports of our major Asian trading partners...also grew. This has had a positive impact on Singapore's exports.'
Source: Straits Times, 15 Jul 2010