Singapore raises trade forecasts for 2020; non-oil exports up 6.5% in Q3

2020 Nodx is tipped to grow by 4 to 4.5 per cent year on year, compared with the previous forecast of 3 to 5 per cent.
2020 Nodx is tipped to grow by 4 to 4.5 per cent year on year, compared with the previous forecast of 3 to 5 per cent. PHOTO: ST FILE

SINGAPORE - Singapore's overall trade and non-oil domestic exports (Nodx) are forecast to grow in 2021, in line with predictions that the global economy will expand over the next year from a low base.

Total merchandise trade is expected to rise by 1 to 3 per cent for 2021, while Nodx is projected to expand by 0 to 2 per cent, government agency Enterprise Singapore (ESG) said in its report on Monday (Nov 23).

Ms Emily Liew, executive director for corporate and strategic planning at ESG, said a conservative forecast was made for next year given the uncertainty in the global economy. 

She noted that the overall Nodx forecast for 2021 is an extension of the gradual recovery from the 2020 base. 

“However, there continues to be downside risks such as US-China trade tensions and uncertainty over the Covid-19 situation globally in 2021, which may impact the recovery trajectory of Singapore’s key trade partners and in turn weigh on demand and global trade,” she said.

“The path to recovery is expected to be slow and uneven across economies, and hence, the forecasts remain cautiously optimistic at this point in time.”

ESG raised its forecast for the Republic's total merchandise trade in 2020, predicting it to shrink at a slower pace of 7 to 7.5 per cent over last year, compared to the -10 to -8 per cent slide forecast in August.

2020 Nodx is tipped to grow by 4 to 4.5 per cent year on year, compared with the previous forecast of 3 to 5 per cent. The revised predictions were made amid better-than-expected performance for specific products such as non-monetary gold and specialised machinery, as well as electronics.

Shipments expanded by 6.5 per cent in the third quarter on growth in both electronic and non-electronic Nodx, adding to the 5.9 per cent rise from the previous quarter.

This was largely bolstered by growth in non-monetary gold and specialised machinery trade, ESG said. Non-electronics Nodx grew 5.7 per cent for the third quarter, up slightly from the 4.6 per cent year on year increase seen in the previous three-month period.

Electronics exports expanded by 9.5 per cent, compared with the 10.6 per cent rise from the previous quarter.

While total trade performed slightly better than expected in the third quarter, declining 6.3 per cent compared with last year and easing from the 15.3 per cent year-on-year contraction recorded in the second quarter, it is still likely to see negative growth for the year.

This is due to a decline in oil trade - 39.5 per cent year on year - amid lower oil prices and weaker demand than a year ago.

Non-oil trade, on the other hand, bounced back in the third quarter, recording a 0.8 per cent year-on-year growth.

Meanwhile, total services trade declined by 18.5 per cent in the third quarter, improving slightly from the 22.4 per cent contraction recorded in the previous period.

It reached $111.9 billion for the three-month period, with exports dipping 17.8 per cent while imports were down 19.2 per cent.

Declines in services exports were attributed to the decrease in travel receipts, transport services exports and maintenance and repair services.

Looking ahead, ESG noted that the International Monetary Fund expects the global economy to grow 5.2 per cent from a lower base in the coming year.

It also highlighted that the World Trade Organisation expects global trade to rebound to 7.2 per cent in 2021. Higher expected oil prices in 2021 may provide some support to Singapore's oil trade and total trade for the year as a result, it added.