Singapore has posted exceptionally strong export figures for December, but the government has warned that trade could slow significantly this year in light of the fallout from the regional currency crisis.
Surging domestic exports of integrated circuits and printed circuit boards saw Singapore's non-oil exports rocket 13.3 per cent in December month-on-month.
However, exports of disk drives and personal computers continued to disappoint. The figures were significantly higher than expectations and surprised some analysts, who had feared the recovery might have fizzled out.
'If we have a recession this year it will be on the services side,' Merrill Lynch economist Tan Min Lan said. 'The outlook for manufacturing is still quite positive.' Total trade growth is projected to slow to between 3.5 and 5.5 per cent this year, according to provisional forecasts from the Trade Development Board (TDB).
This compares to 5.7 per cent for 1997, the official year-end figure released by the TDB yesterday, which was towards the lower end of its earlier 5-7 per cent projection.
Exports of oil and services are expected to be worst hit. TDB chief executive Barry Desker said: 'Given the volatility of development in the regional economies, it will only be possible, at this stage, to make a tentative assessment of how our trade performance in 1998 would be effected.' He warned that the currency crisis was likely to dampen growth not just in Southeast Asia but also in developed economies such as the United States. He said it was too early to accurately quantify the impact on Singapore.
The International Monetary Fund predicts world trade growth will slow from 8.6 per cent to 6.2 per cent this year.