Singapore: Singapore’s exports in June extended the longest run of declines since the global financial crisis, suggesting economic growth last quarter may have been less than the government initially estimated.

“Non-oil domestic exports slid 8.8% from a year earlier, falling for a fifth month," the trade promotion agency said in a statement on Wednesday. The median of 17 estimates in a Bloomberg News survey was for a 5.8% drop.

While Singapore’s economy grew at the fastest pace in more than two years last quarter as services strengthened and manufacturing rebounded, improvements haven’t been matched in shipments to the US or Europe. The Asian Development Bank on Tuesday trimmed forecasts for growth in developing Asia, as cooling exports from South Korea to Malaysia underscore weakness in Chinese growth and world demand.

“External headwinds remain strong," Irvin Seah, a Singapore-based economist at DBS Group Holdings Ltd, said before the report. “Data from the US have been mixed and Europe is still stuck in recession."

The Singapore dollar was little changed at S$1.2613 against the US currency as of 10:04 am local time. The currency has weakened about 3% in the past six months even as the central bank maintained a policy of allowing gradual gains.

‘Delayed’ recovery

“Demand from the US, Europe and Japan stands out for its weakness and that is still a cause for concern," said Alvin Liew, a senior economist at United Overseas Bank Ltd in Singapore. “The recovery process for exports, especially for electronics, could be delayed."

“Singapore’s gross domestic product rose an annualised 15.2% in the three months through June from the previous quarter, when it grew 1.8%," the trade ministry said 12 July. “The figures were computed largely from data in the first two months of the quarter, and revised numbers will be released next month."

“The island’s shipments of electronics dropped 12.4% in June from a year earlier, extending the slump to an 11th month," report showed.

“The weak growth coming from the advanced economies, the weak demand, is having a much bigger effect than we had anticipated," ADB assistant chief economist Joe Zveglich told Bloomberg Television’s Susan Li in an interview in Tokyo.

IMF forecast

The International Monetary Fund reduced its global growth forecast this month as the US recovery weakens, China levels off and Europe’s recession deepens. China’s economy slowed for a second quarter in the three months through June as growth in factory output and fixed-asset investment eased and Premier Li Keqiang reined in a credit boom.

Bank of Japan minutes released on Wednesday from a June meeting showed policy board members’ view that China has become less likely to return to a high growth path. The Bank of England is also due to release minutes of the first meeting led by governor Mark Carney, while all economists surveyed by Bloomberg forecast Canada will leave interest rates unchanged at 1%.

In the US, housing-starts data are due, and the Federal Reserve will release its Beige Book survey of economic conditions. Fed chairman Ben S. Bernanke will deliver his semi-annual monetary policy report to Congress, followed by questions from lawmakers. On 10 July, Bernanke said that highly accommodative monetary policy for the foreseeable future is what’s needed in the US economy.

US, Europe

Singapore’s exports to the world’s largest economy fell for a second month in June, declining 15.9%. The US was Singapore’s fifth-biggest trading partner in 2012 after Malaysia, the European Union, China and Indonesia. Shipments to the EU tumbled 33.6%. Swings in demand for pharmaceuticals can make Singapore’s export figures volatile.

Located at the southern end of the 600-mile (965-kilometer) Malacca Strait, Singapore is home to one of the world’s busiest container ports. The government has boosted the financial services and tourism industries to become less reliant on exports.

The island’s non-electronics shipments, which include petrochemicals and pharmaceuticals, fell 7.1% last month from a year ago. Petrochemical exports climbed 5.7%, while pharmaceutical shipments dropped 35.4%.

The government forecasts exports will rise 2% to 4% this year and predicts economic growth of 1% to 3%. Non-oil exports rose a seasonally-adjusted 3.2% last month from May, when they dropped 1.1%, Wednesday’s report showed.