Non-oil domestic exports climbed 26.1% from a year earlier, after an 8.7% gain in November, the trade promotion agency said in a statement today. The median forecast of eight economists surveyed by Bloomberg News was for a 22% increase. Overseas shipments fell about 11% in 2009, the worst in eight years.

 

Singapore is dependent on a revival in overseas sales to sustain its recovery after exiting its worst recession since independence in 1965. Trade Minister Lim Hng Kiang said last week he doesn’t expect a return to recessionary conditions in 2010 even as exports may grow at a “sluggish pace.”

 

“Exports are seeing a genuine improvement as a result of stronger regional and global domestic demand,” said Robert Prior-Wandesforde, senior Asia economist at HSBC Holdings Plc in Singapore. “It is beginning to look likely that first-quarter gross domestic product will bounce, and bounce strongly after the pharmaceuticals-related decline in the fourth quarter.”

 

Singapore’s economy shrank for the first time in three quarters in the last three months of 2009 as weaker manufacturing output interrupted the island’s recovery.

 

The export decline in 2009 was in line with the government’s prediction for shipments to drop 10% to 11%. Exports fell 7.9% in 2008.

 

Singapore’s non-oil exports gained a seasonally adjusted 1.7% last month from November, when they rose 19.8%, today’s report showed.

 

“We expect continued improvement in exports even though it will be a gradual one,” said Vishnu Varathan, a regional economist at Forecast Singapore Pte. “Whether the end demand will be sustained, which will ensure a robust recovery, remains to be seen.”

 

Electronics shipments climbed 25.2% in December from a year earlier to $5.2 billion, after a 6.1% decline in November. That was the first gain since January 2007.

 

“It is clear that the sector has been on an improving trend for a few months now but this is a blowout number, which strongly supports the notion that the global electronics cycle has turned,” Prior-Wandesforde said.

 

Non-electronics shipments, which include petrochemicals and pharmaceuticals, rose 26.8% in December after increasing a revised 18.9% in November. Pharmaceutical shipments jumped 75.7%.

 

The performance of Singapore’s pharmaceutical industry is volatile as production swings by companies such as Sanofi- Aventis SA can cause industrial output to fluctuate from month to month. Drug companies sometimes shut plants for cleaning before making different products.