Singapore key exports eke out 0.2% growth in 2024, with 2025 forecast clouded by Trump tariffs
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Although Singapore is expected to avoid direct tariffs from the US, it is vulnerable if major trading partners are affected, analysts said.
ST PHOTO: AZMI ATHNI
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SINGAPORE - Singapore’s key exports managed to claw back into positive territory in 2024, reversing a contraction in 2023, but downside risks weigh on 2025’s forecast for higher growth in the face of a potential trade war.
Enterprise Singapore in its trade review report released on Feb 14 kept its 2025 forecast for growth in non-oil domestic exports (Nodx) at 1 per cent to 3 per cent, saying the external outlook remains supportive for the global economy and trade.
However, it warned that “significant uncertainties” from trade frictions among major economies could result in a more challenging and competitive trade environment, and pose a downside risk to its 2025 Nodx forecast.
Nodx grew 0.2 per cent in 2024 from a 13.1 per cent contraction in the previous year. Growth, though, came below the official forecast of “around 1 per cent”.
In the fourth quarter of 2024, the Singapore economy grew by a better-than-expected 5 per cent year on year, taking full-year growth to 4.4 per cent, faster than the 1.8 per cent recorded in 2023.
But the Government kept unchanged its slower growth forecast for 2025
Mr Trump on Feb 13 unveiled a road map for charging reciprocal tariffs
The reciprocal tariffs would match the higher duty rates charged by other countries, a White House official said.
The US President has already announced 25 per cent tariffs on all steel and aluminium imports beginning on March 12, slapped additional 10 per cent tariffs on goods from China, and imposed a 30-day hold on tariffs on goods from Canada and Mexico.
Mr Trump is also looking at separate tariffs on cars, semiconductors and pharmaceuticals.
Mr Chua Han Teng, an economist at DBS Group Research, said that even though Singapore is expected to avoid direct tariffs from the US, it is vulnerable if major trading partners are affected.
Any resulting deceleration in global economic growth and trade could affect Singapore, he said.
Ms Selena Ling, OCBC Bank’s chief economist and head of global markets research and strategy, also expects that Singapore’s small open economy may not be immune to the risk of an escalating trade war, notwithstanding its free trade arrangement with the US.
For 2024, electronics Nodx expanded 8.2 per cent, after a 19.7 per cent contraction in 2023, in tandem with the global electronics recovery.
Growth in shipments of integrated circuits, disk media products and personal computers contributed the most.
However, non-electronics Nodx contracted 1.9 per cent in 2024 owing to the volatile pharmaceuticals as well as ships and boats segments.
This, though, is less than the 11.1 per cent drop in 2023.
Mr Brian Lee, an economist at Maybank Securities, attributed the growth in electronics shipments to “front-loading” as companies rushed to beat Mr Trump’s new proposed tariffs.
He said Singapore could benefit from more front-loading of orders in the first quarter of 2025 as producers in other countries expedite their exports to the US ahead of looming tariffs.
The World Trade Organisation expects global merchandise trade to grow by 3 per cent in 2025, faster than the 2.7 per cent in 2024.
The International Monetary Fund has projected that global economic activity will grow by 3.3 per cent in 2025.
Most of Singapore’s key trade partners, including China, the US, the European Union and Asean-5, are projected to grow.
