Muted growth could threaten exports amidst dull electronics segment: analyst

It could look to increase production of the popular radio frequency silicon-on-insulator (RF-SOI) chips.

The lacklustre export growth could sustain in the long-term trend with the electronic segments stuck in a continuous decline, RHB said.

“However, August data indicate that the contraction in the electrical and electronic (E&E) sector may have bottomed out,” the firm noted.

Also read: NODX eases down growth to 5% in August

“Going forward, we expect real export growth to moderate to 3.6% in 2018 from 4.1% in 2017, dragged by higher base effects and the withdrawal of demand from the smartphone super-cycle,” they added.

Despite this, the firm noted that the exports could get a lift from the increased production of the radio frequency silicon-on-insulator (RF-SOI) chips used in smartphones amidst its popularity.

Moreover, the expected rising demand for capital goods, especially from advanced economies will also serve to buoy Singapore’s export.

“Growth in the US is anticipated to be stronger, underpinned by the tax cut policy in late 2017 whilst in the EU and Japan, demand is expected to be supportive although minimal,” RHB explained.

In August, Singapore’s non-oil domestic exports (NODX) grew by 5% YoY in August, which is lower compared to the 11% expansion recorded in July 2018 but still in line with expectations. It was backed by the growth in non-electronic NODX which outweighed the decline in electronics.

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