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UOB Global Economics and Markets Research has cut its full year forecast for Singapore's export growth after IE Singapore said external trade has fallen by 12 per cent in October to S$12.4 billion, compared to a year ago.
The fall is the largest decline in seven months and was driven by a slump in pharmaceutical exports. It was much worse than the 3.5 per cent drop expected by economists polled by Reuters.
The decline in non-oil domestic exports (Nodx) was led by a sharp 14.6 per cent year-on-year drop in non-electronic exports to S$8.4 billion. Pharmaceutical shipments in October contracted 47 per cent from a year ago to about S$1 billion, compared to a gain of 16.2 per cent in September.
UOB senior economist, Ho Woei Chen, noted that non-oil re-exports (Norx) - a gauge on the regional and global trading sentiments - contracted by 8.9 per cent year-on-year in October, compared to 1.2 per cent increase in September.
"With today's weak Nodx data, we cut our full year Nodx growth forecast to -4.1 per cent, from 2.5 per cent previously,'' Ms Ho said, adding that the latest figures suggest global demand outlook remains clouded.