Chart of the Day: Here's why higher oil prices won't help Singapore's struggling exports

A major recovery is unlikely, experts say.

Singapore's heavily export-oriented economy has been pummelled by weak global demand and the slide in oil prices. Although commodity prices have recovered marginally in the past few weeks, analysts are doubtful over whether the recovery will spell a turnaround for the city-state's economy.

"While the contraction of exports to the EU and China appears to have bottomed in recent months and oil prices have recovered a tad, we believe it remains challenging to envision a major turnaround in Asia’s, including Singapore’s, exports in the coming months," Deutsche Bank said in a report.

The report noted that in terms of destination, the decline in Singapore's exports growth is broad-based, led by the deceleration in demand from China, which accounts for about 20% of total non-oil domestic exports inclusive Hong Kong, the EU (10%), and the US (7%).

“The protracted stagnation of global exports may be structural in nature. These trends are unlikely to drastically change soon and thus Asia’s, including Singapore’s, external sector could only see piecemeal
improvements in earnings in the coming months,” the report said.