Singapore losing the export race versus regional peers as local competitiveness deteriorates

Restructuring pains are here to stay.

Singapore’s exports are contracting at an alarming pace, and the downtrend could spell trouble down the road for the Lion City.

According to a report released today by DBS, Singapore’s export competitiveness continues to deteriorate compared to its regional peers, which will have medium-term implications on growth.

“With higher inflation and a strengthening SGD, Singapore's real exchange rate (REER) has appreciated vis-a-vis the average REER of these eight Asian economies as well. The appreciation in Singapore's REER implies a deterioration in export competitiveness, with medium-term implications for growth,” stated DBS.

DBS also noted that the continued deterioration of Singapore’s non-oil domestic exports will produce significant downside risks to GDP growth if the downtrend continues on to 2015.