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Singapore exports forecast to shrink or stay flat in 2023 as growth slows to 3% last year
SINGAPORE – Singapore’s key non-oil domestic exports (Nodx), and total merchandise trade, which includes oil, are expected to post minus 2 per cent to 0 per cent growth this year, Enterprise Singapore (EnterpriseSG) said on Monday, maintaining its earlier forecast.
This is as Nodx growth slowed to 3 per cent last year from 12.1 per cent in 2021, with fourth-quarter shipments dropping by a sharp 14 per cent after the third quarter’s 7.1 per cent growth.
Although Singapore’s oil trade grew by 47.5 per cent last year as oil prices soared in the wake of the Russia-Ukraine war, prices are expected to ease this year.
For the fourth quarter, under-pressure electronic exports contracted by 15.9 per cent, accelerating from the previous quarter’s 1.8 per cent decline. Non-electronic exports dropped by 13.4 per cent, reversing the 10 per cent rise in the third quarter.
EnterpriseSG said the pace of Nodx growth had eased in 2022, “partly reflecting weakened global semiconductor demand and global economic activity”.
For this year, Singapore’s total trade and Nodx are expected to “moderate from the high base in 2022” given the darker global economic and trade outlook, it said.
Citing International Monetary Fund projections that global economic activity will grow by a slower 2.9 per cent in 2023, EnterpriseSG said: “Most of Singapore’s key trade partners, including the United States, euro zone and Asean-5, are expected to grow at a slower pace in 2023, except China and Japan.”
On the trade front, the World Trade Organisation has projected “subdued” global merchandise trade, with growth slowing to 1 per cent from 2022’s estimated 3.5 per cent.
“Headwinds in the global economy, including the war in Ukraine, inflation and monetary tightening, could weigh on global trade and output,” said EnterpriseSG.
The agency said that lower oil prices expected this year could weigh on Singapore’s oil trade, while moderating global demand for semiconductors could drag down electronics trade.
Last year, Singapore’s total merchandise trade, which includes total exports and total imports, grew 17.7 per cent to $1.4 trillion.
That marks a slowdown from the 19.7 per cent growth recorded in 2021, but is still a better performance than in 2020, when total merchandise trade fell by 5.2 per cent.
The increase in total merchandise trade was driven by both oil and non-oil trade.
Higher oil prices boosted oil trade, which expanded by 47.5 per cent in 2022, following the 43.6 per cent increase in 2021.
Non-oil trade grew by 11.9 per cent last year, slowing from the 15.9 per cent increase in 2021.
Nodx’s 3 per cent growth in 2022 was driven by higher shipments of both electronic and non-electronic products.
The US, European Union, Malaysia and Japan were Singapore’s top export markets last year, while shipments to China and Hong Kong saw the biggest declines.
Source: https://www.straitstimes.com/business/singapore-exports-forecast-to-shrink-or-stay-flat-in-2023-as-growth-slows-to-3-last-year