SINGAPORE - Overall merchandise trade for Singapore is expected to grow between 2 per cent and 4 per cent for the whole of 2021, up from an earlier forecast of 1 to 3 per cent growth made in November, with higher expected oil prices tipped to support oil and total trade.
However, the forecast for non-oil domestic exports (Nodx) was kept at between 0 per cent and 2 per cent expansion, with continued risks and uncertainties in the global economy, said government agency Enterprise Singapore (ESG) in its trade performance review on Monday (Feb 15).
Nodx grew 4.3 per cent in 2020, reversing the 9.2 per cent year-on-year decline seen in the previous year, due to higher shipments of both electronic and non-electronic products.
This was despite a decline of 5.2 per cent in total merchandise trade year on year in 2020, after a 3.2 per cent dip the previous year. Total trade reached $969 billion in 2020, with both exports and imports seeing a decrease.
This weakening in overall trade was mainly due to the contraction in oil trade by 31 per cent in 2020 amid lower oil prices than a year ago, continuing the 13.9 per cent slide seen in 2019.
On a year-on-year basis, Singapore's overall trade shrank 5.1 per cent in the fourth quarter, with the contraction in the oil trade outweighing the rise in non-oil trade.
In 2020, Nodx expansion was supported by growth in exports of electronic products such as disc media products and telecommunications equipment, as well non-electronic items like non-monetary gold and pharmaceuticals.
Non-oil exports to most of Singapore's top markets grew in 2020, with the United States, Japan and South Korea the biggest contributors to this increase.
Similarly, electronic Nodx to top markets also increased, with Taiwan, the US and Thailand among the largest buyers.
Meanwhile, total services trade fell 14.3 per cent in 2020 to $497.1 billion, after the 5.7 per cent expansion seen the previous year.
Both services exports and imports decreased over the year due to reasons such as lower receipts from travel and transport.
For the fourth quarter, total services trade contracted 16.3 per cent on a year-on-year basis.
ESG's upgraded trade forecast comes after improved oil prices, which may provide some support to Singapore's oil trade in nominal terms and total trade as well.
The International Monetary Fund expects global trade volumes to grow 8.1 per cent in 2021, following the 9.6 per cent decline seen in 2020.
On Monday, the Ministry of Trade and Industry announced that given factors such as the Covid-19 vaccine roll-out in many economies across the world and weakened growth prospects for regional economies like Malaysia and Indonesia, Singapore's gross domestic product growth forecast for 2021 would be maintained at 4 per cent to 6 per cent.