NODX tipped to expand 5.5-6% in 2018
Growth forecasts for trade and NODX were sharply raised after better-than-expected showing in the third quarter
Singapore
TOTAL merchandise trade as well as non-oil domestic exports performed better than expected in the third quarter, leading the government to raise sharply its full-year growth forecasts.
Total trade rose for an eighth straight quarter at 14.7 per cent over a year ago in the July-September quarter, extending the second-quarter's 10.2 per cent jump - thanks to higher oil and non-oil trade, according to the government's trade promotion agency Enterprise Singapore.
The NODX grew 8 per cent, the fifth consecutive quarterly rise - it was up 9.3 per cent in April-July. Non-electronic NODX shipments, up 12.6 per cent after easing from a 16.5 per cent rise in the previous quarter, was the main driver of the third-quarter increase.
Domestic electronic exports continued to fall. They dipped 3 per cent in the third quarter, against a 7.8 per cent drop in the second.
Enterprise Singapore attributed the surprising strong showing in total trade and the NODX to "favourable sector-specific export trends in the pharmaceuticals and food and beverages clusters" as well as higher oil prices which gave a boost to oil trade.
Oil trade was up 28.2 per cent, after a 23.1 per cent hike in the previous quarter.
With total trade and the NODX growth expected to remain firm for the rest of 2018, Enterprise Singapore has upgraded its full-year growth forecasts to 9-9.5 and 5.5-6 per cent respectively. The forecasts were last adjusted in August to 5-6 per cent for total trade and 2.5-3.5 per cent for the NODX.
But Enterprise Singapore sees both total trade and the NODX growth easing next year to 0-2 per cent.
"For 2019, Singapore's key trade partners, such as China, Asean-5, the eurozone, the US and NIEs are expected to grow, though the pace is likely to moderate from the performance in 2018 and 2017," it says. "Downside risks such as trade tensions, rising global interest rates and tightening financial conditions may also weigh on global growth and trade flows."
The World Trade Organization projects world merchandise trade to grow slower at 3.7 per cent in 2019, down from 3.9 per cent in 2018, as global GDP growth slows to 2.9 per cent. The International Monetary Fund also expects world trade growth to ease from 4.2 per cent in 2018 to 4 per cent next year, with slower global economic growth.
Domestic shipments to China, South Korea and Hong Kong already fell in the third quarter, though NODX flows to the rest of Singapore's top 10 markets continued to expand. The biggest contributors to NODX's rise in July-September were the US (+34.6 per cent), the EU (+18.4 per cent) and Indonesia (+28.1 per cent).
Total services trade continued to grow in the third quarter, extending the 2.9 per cent growth in the previous quarter to 3 per cent. Total services trade rose to S$120.2 billion, with both services exports and imports increasing 3.3 and 2.7 per cent respectively.
"The growth in services exports can be attributed to the increase in receipts from charges for the use of intellectual property (+28.9 per cent), other business services (+2.3 per cent) and financial services (+3.5 per cent)," Enterprise Singapore says.
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