Singapore keeps 2022 export forecasts; 2021 NODX beats official estimates to grow 12.1%

SINGAPORE has held the forecast for key exports in 2022, in the wake of downgrades to international economic and trade growth forecasts.

The latest update came even as non-oil domestic exports (NODX) expanded by 12.1 per cent year on year in 2021, beating official estimates of a 9.5 per cent to 10 per cent increase.

The NODX increase in 2021 was up from 4.3 per cent growth in 2020, and marks the fastest pace of expansion since 2010.

NODX is still expected to rise by 0 and 2 per cent year on year in 2022, trade agency Enterprise Singapore (ESG) announced on Thursday (Feb 17).

“Total merchandise trade grew in 2021, supported by both the growth in oil trade amid higher oil prices than a year ago, as well as non-oil trade. Both electronic and non-electronic NODX grew for the second year straight in 2021, amid favourable sector-specific output and exports trend,” said ESG. “In 2022, the pace of growth is expected to moderate from the high base in 2021.”

Total merchandise trade grew by 19.7 per cent in 2021, reversing the previous year’s 5.2 per cent decline, while services trade rose by 6.8 per cent, against a dip of 0.7 per cent before.

Non-oil re-exports (NORX) – a proxy for the wholesale trade sector – was up by 19.2 per cent, compared with 0.1 per cent in 2020.

ESG noted that higher oil prices are expected to support oil trade in nominal terms, which will benefit total trade in 2022, but the International Monetary Fund has also cut its global outlook amid the spread of the Omicron variant of the novel coronavirus.

“Taking the above into consideration, the 2022 growth projections for both total merchandise trade and NODX are maintained at 0 to 2 per cent,” the agency concluded.

Still, OCBC chief economist Selena Ling said: “Our 2022 NODX growth forecast remains at a more sanguine 4-8 per cent year on year, predicated on demand for electronics and various non-electronics goods to sustain.”

That’s as Singapore’s latest full-year NODX showing “suggests that Singapore was a key beneficiary of the demand growth upturn and was well-positioned to weather any global supply chain bottlenecks”, according to her note.

NODX to Singapore’s top 10 markets grew overall in 2021, which ESG attributed to demand from mainland China, Taiwan and South Korea, despite declines in exports to the United States, Japan and the European Union.

The trade performance was capped by a jump in exports in the final quarter of 2021.

Headline NODX rose by 20.1 per cent year on year in the October-to-December period, up from 9.0 per cent in the 3 months prior.

Exports were lifted by both the linchpin electronics cluster, which expanded by 19.1 per cent, and non-electronics shipments, which gained 20.4 per cent on year.

NORX increased by 20.8 per cent in the fourth quarter, up from 16.3 per cent in the previous quarter, on higher shipments of both electronic and non-electronic re-exports.

Total merchandise trade expanded by 28.8 per cent, improving from the 19 per cent increase in the previous quarter.

Services trade grew by 10.6 per cent in the fourth quarter, against 11.5 per cent before.

On a seasonally-adjusted, quarterly basis, NODX was up by 5.4 per cent in the fourth quarter, picking up from 2.2 per cent in the third quarter.