Singapore’s key exports may shrink in 2025 amid US tariffs, trade war: Economists

SINGAPORE - Several economists have lowered their forecasts for Singapore’s key exports, expecting them to shrink in 2025 as the economy confronts the global trade chaos sparked by

US President Donald Trump’s tariff barrage

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Enterprise Singapore, which released the latest March data for non-oil domestic exports (Nodx) on April 17, noted that it is “actively monitoring the evolving tariff situation and will adjust the Nodx forecast for 2025 as necessary to reflect the changing market conditions”.

The trade agency had forecast in February that Nodx would rise by 1 per cent to 3 per cent in 2025, after eking out 0.2 per cent growth in 2024.

Its latest data showed growth in key exports slowed in March ahead of Mr Trump’s April 2 announcement of global tariffs that triggered an escalating trade war with China.

Shipments in March rose 5.4 per cent year on year, worse than expected and lower than the 7.5 per cent increase in February. Analysts polled by Reuters had forecast growth of 14.1 per cent.

Electronics exports expanded 11.9 per cent year on year – though this was from a low base a year ago. Growth was underpinned by personal computers, disk media products and integrated circuits.

Non-electronics exports grew 3.8 per cent – half the pace of February’s revised 7.7 per cent increase.

Non-monetary gold led the charge with a 64.7 per cent expansion, while pharmaceuticals rose by 24.9 per cent.

Nodx to Taiwan, Indonesia and South Korea grew, though shipments to China – Singapore’s single largest export market – declined.

The main drag on Nodx was China, which saw a 29.4 per cent drop in shipments versus a 27.4 per cent plunge in February.

Maybank Research senior economist Chua Hak Bin said the decline in exports to China suggests that US tariffs are disrupting Chinese demand and manufacturing supply chains.

“Looking ahead, export growth is losing momentum and may contract in the coming months,” he said.

Shipments to the US grew 5.7 per cent in March, a sharp drop from the 21.5 per cent growth in February.

Exports to Taiwan rose by 45.7 per cent in March, following the 77.9 per cent expansion the month before due to specialised machinery, measuring instruments and integrated circuits.

Shipments to Indonesia expanded by 63 per cent in March, after the 5.4 per cent decline in the month earlier. Growth was underpinned by structures of ships and boats, personal computers and non-monetary gold.

Nodx to South Korea rose by 21.6 per cent in March, after the 31.4 per cent growth in the preceding month owing to specialised machinery, measuring instruments and integrated circuits.

Compared with a year earlier, total trade rose 3.4 per cent in March, following a 4.6 per cent expansion in February.

DBS Bank senior economist Chua Han Teng said any downward revision of Enterprise SG’s export forecasts should align with the weaker 2025 gross domestic product (GDP) growth outlook.

He noted that the World Trade Organisation (WTO) has already slashed its 2025 forecast for the volume of global trade in goods due to the sweeping tariffs, ensuing retaliation and uncertainty. 

The WTO now expects world merchandise trade volume to contract by 0.2 per cent instead of expanding by 2.7 per cent as in its January forecast.

The Ministry of Trade and Industry on April 14 lowered its forecast for full-year 2025 GDP to a range of zero per cent to 2 per cent, from 1 per cent to 3 per cent previously.

Other analysts have also revised their Nodx forecasts for 2025.

Mr Barnabas Gan, group chief economist at RHB Bank, lowered his full-year growth forecast to zero per cent, with downside risks, from 2 per cent.

OCBC Bank chief economist Selena Ling cut her 2025 Nodx forecast to a range of minus 1 per cent to 1 per cent, down from a previous forecast of 2 per cent to 4 per cent.