SINGAPORE - Official forecasts for Singapore's key exports and overall merchandise trade have been raised, amid better-than-expected growth seen in the first quarter of 2021.
Non-oil domestic exports (Nodx) are now expected to expand between 1 per cent and 3 per cent for the year, up from 0 per cent to 2 per cent. Total trade is predicted to increase 5 per cent to 7 per cent, higher than the 2 per cent to 4 per cent forecast in February.
This comes after Nodx rose 9.7 per cent year on year in the first quarter, driven by increases in both electronics and non-electronics shipments and reversing the 0.5 per cent decline seen the previous quarter, according to data released by Enterprise Singapore (ESG) on Tuesday (May 25).
The agency said that both total trade and Nodx grew better than expected in the first quarter, with robust semiconductor demand, electronics exports and related specialised machinery driving the bulk of Nodx increases.
Key electronics shipments increased 14.8 per cent for the first quarter, building on the 2.6 per cent growth from the previous quarter, due to higher demand for products such as telecommunications equipment.
Non-electronics exports also grew 8.3 per cent, supported by increases in specialised machinery, primary chemicals and petrochemicals shipments.
On a quarter-on-quarter seasonally adjusted basis, Nodx grew 17.7 per cent, in contrast to the 4.7 per cent decline seen in the previous quarter.
Nodx to Singapore's top 10 markets grew in the first quarter of this year, with China, South Korea and Taiwan the biggest contributors.
Oil domestic exports declined 19.3 per cent year on year, easing from the 30.6 per cent contraction the previous quarter.
Overall, Singapore's total merchandise trade for the first quarter increased 4.9 per cent year on year, following the 5.1 per cent decline seen the previous quarter. This was due to an increase in non-oil trade, which outweighed the dip in oil trade.
On the other hand, total services trade for the first quarter contracted 10 per cent year on year, with negative growth recorded by both exports and imports of services.
Services exports fell 7.8 per cent in the first quarter, largely due to declines in the exports on travel services, transport services and maintenance and repair services. At the same time, services imports slid 12 per cent, due to lower imports of travel services, transport services and other business services.
ESG highlighted that risks and uncertainties remain in the economy, with the International Monetary Fund (IMF) having upgraded 2021's global output growth to 6 per cent in 2021 based on a vaccine-powered recovery.
The growth forecast for the Asean-5 countries - Indonesia, Malaysia, the Philippines, Singapore and Thailand - was adjusted downwards by the IMF in April, though forecasts for Singapore's key trade partners such as the United States, China and the Euro area were upgraded.
Overall, improved oil prices could provide support for oil trade and total trade in 2021, contributing to the raised growth projections for the year, ESG said.