Singapore Q2 non-oil exports jump 9.4%; full-year forecast raised to 2.5-3.5%

NON-OIL domestic exports (NODX) jumped 9.4 per cent year-on-year in the second quarter, up from 1.1 in the first, leading government planners to raise the full-year export growth forecast from 1-3 per cent to 2.5-3.5 per cent.

Similarly, trade expanded 10.2 per cent, against 2.5 per cent in the first quarter, prompting the growth forecast for 2018 to be upgraded from 3-5 per cent to 5-6 per cent, according to government trade promotion agency Enterprise Singapore.

"Total trade and NODX performed better than expected in Q2 2018 on the back of favourable sector-specific export trends in the food & beverages, machinery and pharmaceutical clusters, while improvement in oil prices supported our oil trade," Enterprise Singapore said.

But the agency cautioned that as in the last update, NODX and total trade growth, while expected to stay firm this year, are likely to ease from 2017's pace.

NODX growth in Q2 was driven by non-electronic exports, which rose for the fourth straight quarter, while electronics declined. Exports of electronic products fell by 7.6 per cent after a 7.9 per cent drop in Q1. Non-electronic shipments expanded by 16.6 per cent, extending the 4.6 per cent growth in Q1.

The IMF (International Monetary Fund) has maintained its 2018 global economic growth forecast at 3.9 per cent, though the projections for the euro area, Japan and the UK have been adjusted down. Growth for Singapore's key trade partners such as China, the NIEs and Asean-5 is still tipped to moderate a little or remained unchanged from 2017. Meanwhile, downward risks such as trade tensions, rising global interest rate and tightening financial conditions may weigh on global growth and trade flows.

On the trade front, the World Trade Organization expects world merchandise trade volume to expand at 4.4 per cent for 2018, broadly matching the 4.7 per cent rise in 2017. Oil prices are likely to be higher in 2018 than in 2017.

Singapore's total services jumped 3.0 per cent in the second quarter to S$119.3 billion, easing from a 4.3 per cent increase in the first quarter