Singapore: Export growth screeches to a halt in June, as trade concerns continue to rise
July 17, 2018
Non-oil domestic exports (NODX) inched up 1.1% in June in annual terms, down sharply from May’s 15.5% growth and markedly undershooting market expectations.
June’s slight uptick was driven by greater non-electronic exports—particularly of food preparations, pharmaceuticals and petrochemicals—and greater demand from the EU and the U.S. However, worsening demand conditions in many Asian markets, such as China, Japan and South Korea, weighed on growth. Moreover, the important electronic sector saw exports decline year-on-year for the seventh consecutive month. After being a major driver of export growth for much of 2017 thanks to booming world trade, the performance of electronic exports so far in 2018 is being affected in part by tough year-on-year comparatives.
On a month-on-month seasonally adjusted basis, exports plummeted 10.8%, contrasting the previous month’s 10.3% rise.
Singapore Trade Balance Forecast
FocusEconomics Consensus Forecast panelists see overall nominal exports expanding 9.7% in 2018 and imports growing 12.3%, with the trade surplus reaching USD 84.4 billion. For 2019, panelists see exports growing 5.4% in 2019 and imports climbing 5.5%, with the trade surplus totaling USD 88.3 billion. The main risk for Singapore’s external sector is that recent tit-for-tat tariffs between the U.S. and China descend into an all-out trade war, which would likely significantly dampen export performance and disrupt regional supply chains.
Author: Oliver Reynolds, Economist