September 19, 2003 – Despite a double-digit increase in IC exports, Singapore’s overall electronics exports slowed year-on-year to 3.5% in August, well behind growth of 10.8% in July and 18.7% in June, according to newswire AFX-Asia.
Electronics goods fell 6.0% during the month, negating gains in other areas including pharmaceuticals and petrochemicals, and prompting analysts to cut their economic growth estimates for the year.
“We did not expect [the electronics sector] to be this bad,” said Nizam Idris, deputy head of research at IDEAglobal, adding that global capex is “still very poor.”
For the year, IC exports have increased 22.6%, offset by steep declines in PC components (-23.5%) and telecommunications equipment (-17.3%).
While acknowledging that the island’s electronics exports lag behind those of Taiwan and Korea amid, analysts stopped short of predicting a recession.
“The second half is probably going to see lukewarm growth,” largely due to a ramp-up in production for the holiday season, said DBS Bank economist Lee Wee Liat.
In response to the numbers, the International Monetary Fund has reduced its projections for South Korea’s economic growth this year, from 5.3% to 4.7%, and cut in half its projections for the country’s GDP growth from 5% to 2.5%.