UPDATE 2-Singapore May exports slide 14.7% y/y, raises recession risk

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Fall marks 8th month of y/y declines, hit by weak global demand

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Likelihood of technical recession increasing - economist

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China rebound only bright spot, but outlook challenging

(Recasts lead paragraph, adds context in paragraphs 2, 5 and export data to China in paragraph 12)

By Xinghui Kok

SINGAPORE, June 16 (Reuters) - Singapore's annual exports fell for an eight consecutive month in May, raising the risk of recession in the trade-reliant economy as global growth weakens in the face of elevated borrowing costs.

Shipments to China picked up but analysts are wary of the broader outlook as post-COVID momentum slackens rapidly in the world's second-biggest economy and points to a tough few quarter for Singapore, whose trade flows are viewed as a gauge of external demand.

The financial hub's non-oil domestic exports (NODX) fell 14.7% in May from a year earlier, official data showed on Friday, a run of declines stretching from October last year.

Last month's decline was driven by falls in both electronic and non-electronic products and compared with a Reuters poll forecast of an 8.1% drop. In April, exports contracted 9.8%.

Singapore's economy contracted 0.4% on a quarter-on-quarter basis in the first quarter of this year, raising the risk of a technical recession, as seen in New Zealand and Germany with demand hit by sweeping rate increases worldwide to rein in hot inflation.

A technical recession is defined as two consecutive quarters of contractions.

Maybank economist Chua Hak Bin said the export downturn is deepening and shows "few signs of turning around", with the May data increasing the likelihood that Singapore may have slipped into a technical recession.

On a month-on-month seasonally adjusted basis, non-oil domestic exports slumped 14.6% in May, following April's 2.6% growth. That was higher than analysts' predictions for a 1.3% decline.

Non-domestic oil exports to Singapore's top 10 markets declined as a whole last month.

Exports to Hong Kong contracted 41.2% year-on-year last month due to on lower shipments of integrated circuits, disk media product and electrical machinery.

Shipments to neighbouring Malaysia declined 26.2% after drops in exports of integrated circuits, non-monetary gold and specialised machinery.

Exports to China grew 3.7% in May, but that recouped only a fraction of the 20.9% tumble seen in April.

Chua described that as the "silver lining", while ESSEC Business School economist Jamus Lim said that rebound still "has not taken up the slack of the continued hammering of non-oil exports". (Reporting by Xinghui Kok; Editing by Martin Petty & Shri Navaratnam)