Escalating China woes are to blame.
There’s no end in sight for the continued contraction in Singapore’s exports, as analysts warn that China’s slowing economy will continue to dampen demand for the city-state’s products over the next two years.
This chart from BMI Research shows that Singapore’s real export growth is forecasted to hover at a measly 1.5% in 2016, following several consecutive months of contraction in 2015.
BMI Research notes that approximately 15.0% of the city-state's non-oil domestic exports (NODX) are headed directly for the mainland, and 23.0% bound for either the mainland or Hong Kong.
“Having become Singapore's single largest national export destination over recent years, China's slowdown will act as a disproportionately large drag on Singapore's growth prospects. While it is not quite reliant upon China and Hong Kong, its high level of trade integration with the two will be sufficient to keep the brakes on trade growth over the near-to-medium term,” BMI Research said.
BMI has downgraded Singapore’s overall economic growth for 2016 to 1.9% from 2.3%.
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