Flailing economy to get another blow from gloomy August export numbers

A technical recession is almost unavoidable.

Although August export figures are yet to be released, analysts are already bracing for a dismal number that will deal another painful blow to Singapore’s flagging economy.

A report by DBS said that the headline non-oil domestic exports (NODX) figure is expected to register a decline of 2.7% year-on-year, plagued by escalating external headwinds arising from China’s slowing growth.

While the depreciation in the SGD may provide some valuation lift to the number, the drag from demand weakness will likely dominate, DBS noted.

“Indeed, the manufacturing sector is already in recession, having contracted by 3 consecutive quarters in year-on-year terms and in 3 out of the past 5 quarters on a sequential basis. This latest set of NODX figure will only exacerbate the decline. No doubt this will raise the risk of a technical recession in 3Q15,” DBS noted.