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SCMP Reporter

The economy began to record the impact of a global slowdown in electronics demand last month as non-oil domestic exports sank almost 5 per cent over the year before.

The slowdown in the high-technology sector is expected to crimp gross domestic product growth this year, holding it to about 5 per cent compared with 10.1 per cent last year.

The Trade Development Board (TDB) yesterday said it remained wary of the impact of a recession in the United States  - Singapore's most important export destination.

'The greatest risk for 2001 is that the US economy goes into a recession. The growth prospect for Singapore exports could be severely affected,' the TDB said.

Total trade was expected to grow between 7 and 9 per cent this year, compared with 22.9 per cent last year.

The TDB, the statutory body in charge of trade and its promotion, said total external trade rose 20.6 per cent last month, as measured on a three-month moving average.

Non-oil domestic exports rose 6.3 per cent on a three-month average compared with November's three-month figure of 12 per cent. In December, it dropped 4.9 per cent to US$9.2 billion.

'While the year-on-year decline [for December] partly reflected volatility of monthly trade data from the high base effect of December 1999 . . . the underlying trend was in line with the slowdown in global electronics demand as well as falling dynamic random access memory prices,' the TDB said.

December 1999 saw brisk trade in electronics goods as businesses stocked up ahead of the millennium date change.

The latest figures from the Semiconductor Industry Association (SIA), a leading United States manufacturers' grouping, highlighted the cooling off in the electronics sector, which accounts for more than 60 per cent of Singapore's non-oil domestic exports.

Worldwide month-to-month semicondictor sales for November were down 2 per cent to US$18.28 billion, the SIA said. The steepest declines came in the Americas, down 5 per cent to US$5.6 billion, and the Asia-Pacific where sales dipped 3.5 per cent to US$4.44 billion, the SIA said.

The TDB also released its summary of the city-state's trade performance for last year, with total trade up 22.9 per cent last year to S$470 billion (about HK$2.11 trillion) compared with the 8.1 per cent gain in 1999 to S$382.4 billion.

'The robust [annual] performance was largely driven by the strong global demand for semiconductors, as well as buoyant demand from the major Asian countries,' the TDB said. Non-oil domestic exports grew by 11.7 per cent last year to S$113.1 billion, higher than the 9.5 per cent expansion in 1999 to S$101.2 billion.

The US, where growth is slowing rapidly, was Singapore's most important market for non-oil domestic exports last year, taking a quarter of the total. The European Union accounted for 17.6 per cent of the total, followed by Malaysia (12.6 per cent).



Slump in global high-tech sector seen taking toll on growth as non-oil exports shrink 4.9pc