Singapore's exports grew at their fastest pace in seven months in May, thanks to a continued surge in pharmaceutical exports, official data showed on Monday (Jun 18).
Non-oil domestic exports (NODX) rose 15.5 per cent in May from a year earlier, data from the trade agency Enterprise Singapore showed, accelerating from an 11.8 per cent surge the month before.
This was significantly better than the 4.7 per cent increase predicted by economists in a Reuters poll.
"This bodes well for the second quarter (exports) given that the first quarter was quite disappointing," said Selena Ling, OCBC Bank's head of treasury research and strategy.
However, the recent sharp export growth has been supported by the volatile pharmaceuticals sector, and analysts including Ling don't expect the uptick to be sustained.
"The pharma sector typically has these cycles which are quite volatile and may last only for the next couple of months."
Pharmaceutical exports expanded 32.1 per cent from the year earlier in May, slowing slightly from a 43.7 per cent rise in April.
The electronics sector, the lynch-pin of Singapore's better-than-expected economic growth last year, saw its sixth consecutive month of decline in May, contracting at 7.8 per cent.
A global exports boom benefited Singapore and other trade-dependent Asian economies last year, particularly for makers of electronics products and components such as semiconductors, though analysts say the sector's growth is past is peak.
On a seasonally adjusted month-on-month basis, exports expanded 10.3 per cent in May after growing 6.5 per cent in April.
The poll called for a 1 per cent expansion from the month before.
Singapore in April tightened its monetary policy for the first time in six years and upgraded its first quarter GDP last month.
There are concerns the simmering trade tensions between the United States and China, Singapore's biggest export market, could drag on shipments and overall economic growth in the city state.
US President Donald Trump said he was pushing ahead with hefty tariffs on US$50 billion of Chinese imports on Friday, and the smoldering trade war between the world's two largest economies showed signs of igniting as Beijing immediately vowed to respond in kind.
"The picture now is probably more clouded by this ongoing tit-for-tat tariffs between China and the US," said Ling.