Service exports from industries such as finance and insurance and wholesale trade are expected to play an increasingly prominent role in the economy.
This is partly because the trade in goods is declining globally, but also because of the opportunities for growth in service sectors, the Ministry of Trade and Industry (MTI) said in a report yesterday.
Singapore's merchandise exports declined at an average rate of 1.9 per cent per year from 2011 to last year, according to the report, which was released alongside the MTI's Economic Survey of Singapore.
The decline was due to sluggish economic growth in the wake of the global financial crisis as well as a shift towards consumption-driven growth in large economies such as the United States and China.
The sharp fall in crude prices since mid-2014 also weighed on the nominal value of oil trade in recent years.
By contrast, service exports expanded at 6.4 per cent per year on average over the same 2011 to 2015 period, supported by healthy growth in the exports of financial and other business services.
"While the ongoing structural shifts in the global and regional economies are likely to continue to pose headwinds to Singapore's merchandise exports, they also present new opportunities for Singapore to grow our service exports over the longer term," MTI said.
The shift towards consumption- driven growth in China, for example, could bring new opportunities to sectors catering directly to these consumption needs or supporting global value chains, the report noted.
Rising consumption and infrastructure spending in Asean and India also present export opportunities for Singapore.
Chia Yan Min