Singapore exports defy US tariffs with 4.8% growth in 2025; analysts say 2026 will be tougher

SINGAPORE – Defying US tariffs, Singapore’s key exports grew faster than officially forecast in 2025, though the momentum slowed in the last month of the year.

In 2026, global trade is expected to face a tougher environment – from the full effects of US tariffs as the front-loading of shipments ends, rising geopolitical tensions, and a possible slowdown in global demand, and AI-driven demand in particular, said economists. That said, Singapore’s strength as a transhipment hub will help to mitigate some of these effects, they said.

Non-oil domestic exports (NODX) expanded 4.8 per cent in 2025, exceeding the official forecast of around 2.5 per cent, according to figures released by Enterprise Singapore on Jan 16.

The growth was a sharp improvement from the 0.2 per cent increase seen in 2024, notwithstanding the volatile and uncertain global environment, said Ms Selena Ling, chief economist and head of research at OCBC.

For 2026, Ms Ling is predicting NODX growth will moderate to 1 per cent to 3 per cent from the 4.8 per cent in 2025.

Singapore’s trade agency in November forecast that the growth in key exports would drop to 0 per cent to 2 per cent in 2026 as tariff impact materialises and front-loading eases.

In December, NODX rose 6.1 per cent year on year – less than the 10.1 per cent increase forecast by analysts in a Bloomberg poll. It was also a slowdown from the 11.5 per cent growth in November and 21.1 per cent surge in October.

Electronics NODX achieved its fourth consecutive month of double-digit growth. Shipments grew 24.9 per cent in December year on year, extending the 12.9 per cent increase in November.

Integrated circuits rose 32.1 per cent, and disk media products 53.5 per cent, while telecommunications equipment surged 81.4 per cent. They contributed the most to growth in electronics exports.

Non-electronics NODX grew 0.8 per cent in December, following the 11.1 per cent expansion in November. The growth was led by non-monetary gold, which increased 73.3 per cent; specialised machinery (5.4 per cent) and mechanical handling equipment (415.8 per cent).

In terms of destinations, NODX exports to China, Taiwan and Malaysia grew in December, while those to the United States, Japan, Hong Kong, Indonesia, Thailand and Europe fell.

Shipments to China, Singapore’s top export market, rose 17.9 per cent in December, after 4.6 per cent growth in November, led by higher exports of specialised machinery, measuring instruments and metal-removing machine tools.

Shipments to the US tumbled 36.3 per cent, reversing from a 106 per cent spike in November.

DBS economist Chua Han Teng and Nomura chief ASEAN economist Euben Paracuelles attributed this to the normalisation of non-electronics shipments, particularly highly volatile pharmaceuticals after their surge in November.

Mr Paracuelles noted that electronics exports remained solid. He said this supports his forecast for the Singapore economy to grow 3.7 per cent in 2026, above the Government’s 1 per cent to 3 per cent forecast range and analysts’ consensus of 2.5 per cent.

Growth will be led by the export-driven manufacturing sector, which is expected to continue to benefit from the growth and recovery of the technology sector and broadening artificial intelligence-related demand.

The Nomura economist also expects transshipment and re-routing to stay strong because Singapore faces lower US tariffs than most of the region.

As a result, Singapore’s economy is likely running above potential, he said, which could push up underlying price pressures and keep the Monetary Authority of Singapore alert on inflation risks.

DBS’ Mr Chua expects electronics exports to stay strong in the near term, supported by forward-looking manufacturing purchasing managers’ indexes (PMIs).

He noted that the electronics PMI continued to outperform the headline manufacturing PMI in December 2025, recovering to levels seen before US President Donald Trump unveiled new tariffs. This reflects solid demand for AI-related servers and components.

However, he said the gains in the headline PMI’s sub-indexes were uneven, suggesting headwinds for non-electronics exports and manufacturing as the delayed effects of higher US tariffs take hold globally.

Maybank economists Chua Hak Bin and Brian Wong pegged their 2026 NODX growth forecast at 3 per cent to 4 per cent. They expect export growth to remain firm at least into the first half of 2026, due to robust AI-driven electronics exports and substitution of US import demand from higher tariff countries.

They said Singapore is a major global hub for the production of high-end flash memory chips, or Nand, and is US chip giant Micron’s main production base.

The opening of Micron’s advanced chips plant along with United Microelectronics’ facilities could boost electronics exports in 2026, as Singapore’s role in the AI supply chain deepens, they said.

That said, pharmaceutical shipments could weigh on NODX, as front-loading tapers, the Maybank economists said.