SINGAPORE on Tuesday, July 17, cut its 2007 trade growth forecasts as key exports expanded at a slower 1.2 percent in June, dragged down by a continued slump in electronic exports.

Overall trade growth projections for 2007 were revised downwards to 5.0 to 7.0 percent from 8.0 to 10 percent due to sustained declines in electronics shipments and a weaker-than-expected trade performance so far this year, International Enterprise Singapore (IE Singapore) said.

IE Singapore also cut its 2007 growth forecast for non-oil domestic exports (NODX), a key health barometer of the trade-driven economy, to 4.0-6.0 percent from 7.0-9.0 percent.

Despite the downward revisions to trade growth, analysts are confident Singapore's economy is still likely to grow 5.0-7.0 percent, as targeted by the government.

"Even if electronics continues to be a drag, we can still see fairly decent growth in the second half," said Song Seng Wun, an economist with CIMB-GK in Singapore.

Song, who expects Singapore to grow 7.5 percent this year, said there was even a chance the government would upgrade its 2007 growth targets to 6.0-8.0 percent from 5.0-7.0 percent if other sectors continued to expand strongly.

The government trimmed its forecasts as data released Tuesday showed NODX expanded an annual 1.2 percent to $14.3 billion (US$9.47 billion) in June, slower than the 3.7 percent rise recorded in May.

Last month's NODX increase was also below the 2.2 to 14 percent growth projected by analysts.

On a month-on-month seasonally adjusted basis, NODX rose 2.9 percent compared with 1.4 percent in May, IE Singapore said.

For June, total exports were worth 37.99 billion dollars and imports 33.93 billion dollars. Total trade for the month was up 0.6 percent to 71.93 billion dollars and rose 2.8 percent to 405 billion dollars in the first-half of 2007.

"Total trade growth in (first-half of) 2007 was lower than expected due to the slower expansion of both the oil trade and non-oil trade," IE Singapore said.

"Growth of non-oil trade was also weak primarily because of sluggish electronic trade, which has been severely hit by falling selling prices even though demand held up well," it said.

Heading into the second-half of 2007, IE Singapore said the "non-oil trade is likely to be weighed down by lacklustre electronics trade as global electronics sales are expected to remain soft for the rest of 2007."

Dismal electronics exports, which fell for the fifth straight month in June, was the main drag, the government said of last month's export performance.

"The weakness in electronic domestic exports can be attributed to the decrease in domestic exports of disk drives, telecommunications equipments, parts of PCs, and diodes and transistors," IE Singapore said.

Electronics shipments slumped 13.1 percent in June to 5.57 billion dollars.

Non-electronic exports, made up mainly of pharmaceuticals and petrochemicals, grew 13.1 percent to $8.72 billion.

Singapore's economy is heavily reliant on trade and the monthly NODX figures are closely monitored to gauge the health of Southeast Asia's most advanced economy.

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