SINGAPORE - The Government has raised Singapore's 2020 trade forecasts with non-oil domestic exports (Nodx) now predicted to grow by 3 to 5 per cent year on year, compared with an earlier forecast for a 1 to 4 per cent fall.
Total merchandise trade, meanwhile, is tipped to shrink at a slower pace of 8 to 10 per cent, from the 9 to 12 per cent slump seen in May.
Trade promotion agency Enterprise Singapore (ESG) said on Tuesday (Aug 11) its upgraded forecasts came amid the better-than-expected performance for specific products, such as non-monetary gold, pharmaceuticals and electronics.
But it cautioned that the global economic outlook remains uncertain, though global trade is unlikely to reach the worst-case scenario earlier projected by the World Trade Organization (WTO).
ESG also announced that second-quarter Nodx came in better than expected, albeit from the low base a year ago, amid "favourable sector-specific export and output trends". Shipments rose up 6.5 per cent in the April-June quarter from the year-ago period, higher than the 5.4 per cent growth in the first quarter.
Total merchandise trade, however, fell 15.2 per cent, reversing from a 0.5 per cent gain in the first quarter. The oil trade contracted by 61.9 per cent year on year on the back of lower oil prices, continuing the 15.9 per cent slide from the previous quarter, while non-oil trade fell by 3.3 per cent.
ESG said the WTO has affirmed that world trade merchandise trade volumes are now unlikely to reach the worst-case scenario of a 32 per cent contraction projected back in April 2020. While world trade fell sharply in the first half of 2020, the contraction was tempered by rapid government responses, it added.
Since the last revision in its trade growth forecasts, the International Monetary Fund has estimated the global economy will shrink 4.9 per cent in 2020, ESG added. But while Singapore's key trade partners were likely to see output decline, China is expected to grow 1 per cent, down from the previous 1.2 per cent estimate, it said.
Improved oil prices since the last update may provide some "directional support for our oil trade" in 2020, ESG added.
For the second quarter, both electronic and non-electronic Nodx, with electronic exports expanding 10.6 per cent year on year, after the 2.3 per cent dip in the first quarter, on the back of growth in areas such as disk media products and telecommunications equipment.
Non-electronic Nodx increased 5.4 per cent, with the largest contributions from non-monetary gold, pharmaceuticals and specialised machinery.
Overall, Nodx to Singapore's top export markets grew. The biggest contributors were the United States, Japan and South Korea,. Exports to China, Hong Kong, Indonesia, Malaysia and Thailand declined.
On a quarterly basis, Nodx declined 2.4 per cent in the second quarter, in contrast to the first quarter's 7.3 per cent expansion.
Singapore's total services trade contracted 22.2 per cent year on year in the second quarter, continuing the first quarter's 3.2 per cent decline.
Total services trade came in at $107 billion for the quarter, with services exports contracting 20.3 per cent, while imports dipped 24.1 per cent.
The decline in services exports was attributed to the decrease in travel receipts, transport services exports and receipts from maintenance and repair services.