Singapore: Export growth gains steam in September
October 17, 2018
Non-oil domestic exports (NODX) increased 8.3% in annual terms in September, up from August’s 5.0% print, but falling short of market expectations of a stronger 11.1% expansion. On a month-on-month seasonally adjusted basis, exports fell 4.3%, down from August’s meager 0.4% increase.
The acceleration in September came on the back of soaring pharmaceutical exports, as well as greater exports of non-monetary gold and food preparations. On the other hand, electronic exports continued their downward spiral, falling for the tenth consecutive month, albeit at a softer rate than in August. Following a robust performance in 2017, the electronic sector has had a lackluster performance in 2018, partly due to a high base effect. In terms of markets, stronger demand from the U.S., EU and Thailand supported the expansion. Meanwhile, demand from other key regional trading partners weakened, with shipments to China and South Korea falling notably.
While September’s annual figure was decent, recent export growth has been buoyed a narrow group of sub-sectors—particularly the volatile pharmaceuticals sub-sector—which underscores the fragility of the expansion and the potential for a slowdown in exports in the future. Moreover, softening Chinese demand and the escalating trade rift between the U.S. and China are key risks to Singapore’s external sector.
Singapore Trade Balance Forecast
FocusEconomics Consensus Forecast panelists see overall nominal exports expanding 4.3% in 2019 and imports growing 2.8%, with the trade surplus totaling USD 83.7 billion. For 2020, panelists see exports growing 4.6% and imports again climbing 2.8%, with the trade surplus reaching USD 93.8 billion.