Enterprise Singapore upgrades 2020 forecast for trade, non-oil domestic exports

SINGAPORE'S authorities on Monday upgraded their full-year projection for total merchandise trade and non-oil domestic exports (NODX), as the Republic's third-quarter total merchandise trade continued to shrink but at a slower pace.

Total merchandise trade declined by 6.3 per cent year on year in Q3, easing from a 15.3 per cent fall in Q2, according to data from Enterprise Singapore (ESG).

Oil trade decreased by 39.5 per cent amid lower oil prices compared to a year ago, but this was an improvement from the previous quarter's 61.9 per cent contraction.

Meanwhile, non-oil trade grew by 0.8 per cent, up from Q2's 3.5 per cent decrease.

Total services trade fell by 18.5 per cent in Q3, following the 22.4 per cent decline in Q2.

NODX grew by 6.5 per cent in Q3, extending the 5.9 per cent growth in Q2. Domestic exports of electronic products grew by 9.5 per cent, while that of non-electronic products grew by 5.7 per cent.

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Although NODX to Singapore's top export markets grew as a whole in Q3, exports to Hong Kong, Indonesia and Thailand fell.

Non-oil exports, which comprise NODX and non-oil re-exports, grew by 2.8 per cent year on year, up from Q2's 1.9 per cent contraction.

Overall, ESG is expecting total trade to decline in 2020, due to lower oil prices and weaker demand compared to a year ago. This comes even as the International Monetary Fund upgraded its global economic outlook as more economies tentatively reopen.

ESG's 2020 growth projection for total merchandise trade has now been adjusted upwards to -7.5 to -7 per cent, while it is expecting NODX to grow by 4 to 4.5 per cent. (see amendment note) For 2021, ESG is expecting total merchandise trade to grow by 1 to 3 per cent, and for NODX to increase by 0 to 2 per cent.

Amendment note: An earlier version of this article put ESG's growth projection for total merchandise trade and NODX to be -7.5 and 4.5 per cent respectively, it should have been -7.5 to -7 per cent and 4 to 4.5 per cent.