, Singapore

Outlook is bleak for Asian exports

Analyst warned Asia’s business and profit cycle will inevitably follow events in the US and Europe.

In its Asian Economic Monitor, UBS Investment Research said, “You can rank importance of exports for economies by looking at the export-to-GDP ratio. In general, Singapore and Hong Kong are affected the most by the trade cycle; India and Indonesia the least.”

Elaborating on trade, UBS Investment Research said:

What the numbers say: In value terms, Asian exports slowed but continued to grow at double-digit year-on-year rate. But in volume terms (which strips out the price and exchange rate effects), data from Taiwan and Korea shows that exports are slowing very sharply.

What they mean: Exports are a key source of income for Asia and are a primary determinant of the Asian business cycle. You can rank importance of exports for economies by looking at the export-to-GDP ratio. In general, Singapore and Hong Kong are affected the most by the trade cycle; India and Indonesia the least.

12-month outlook: We expect low single-digit export growth next year. Leading indicators, in particular the US ISM, and import demand from China are heading south after the strong patch in 2H10.

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