Downside risks could intensify for exporters once 90-day tariff truce expires: EnterpriseSG
Singapore’s key exports for Q1 climb 3.3%; agency maintains 2025 growth forecast at 1-3%
[SINGAPORE] Singapore’s key exports increased 3.3 per cent in Q1 2025 ended March, higher than the 2.4 per cent expansion in the previous quarter.
Enterprise Singapore (EnterpriseSG) said on Thursday (May 22) that non-electronic domestic exports – which made up 79 per cent of non-oil domestic exports (NODX) – rose 1.8 per cent year on year in Q1 2025, reversing the 0.7 per cent contraction in the previous quarter.
The increase was largely driven by strong gains in non-monetary gold – which rose by 86.5 per cent – and ship and boat structures, which surged by 637.4 per cent.
Meanwhile, electronics domestic exports, which accounted for 21 per cent of total NODX, expanded 9.5 per cent, easing from the 14.2 per cent growth recorded in Q4 2024. Growth was led by personal computers and disk media products, which rose 69.8 per cent and 35.8 per cent, respectively.
NODX to key markets saw robust improvement in the first quarter of 2025, with shipments to the US rising 19.2 per cent, Taiwan climbing 55.5 per cent, and Hong Kong increasing 24.7 per cent.
In April, key exports exceeded expectations with a 12.4 per cent increase on front-loaded shipments amid US President Donald Trump’s tariff truce.
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But for the full year, EnterpriseSG said, the external outlook has softened amid tariff and trade policy uncertainties, though global growth remains supportive.
The International Monetary Fund projects the global economy to grow by 2.8 per cent, with key trade partners such as China, the US, EU-27 and Asean-5 showing growth.
Meanwhile, the World Trade Organization expects a slight 0.2 per cent contraction in global merchandise trade volumes. Domestically, about 30 per cent of pharmaceuticals and transport engineering firms anticipate new export orders in the second quarter.
Taking these factors into account, Enterprise SG maintains the NODX growth forecast for 2025 at between 1 and 3 per cent growth. The lower bound reflects a cautious outlook for the second half of the year due to evolving tariff risks.
Despite the recent easing of US-China trade tensions, downside risks could intensify once the 90-day reciprocal tariff reprieve expires, the agency added, saying: “These risks include weaker-than-expected demand from key partners and slower growth in major export products.”
DBS senior economist Chua Han Teng noted that exporters are expected to capitalise on temporarily lowered tariffs during the 90-day reciprocal truce between the US and China, which began in mid-May. This is likely to result in front-loaded orders – a move likely to bolster Singapore’s trade performance in the near term.
However, he cautioned that this early boost could be followed by a “payback period” in the second half of 2025, with trade and production growth slowing as a result.
“While the temporary de-escalation of US-China tensions is encouraging, global trade frictions remain elevated compared to pre-Trump 2.0 levels,” Chua added.
He also pointed to lingering uncertainties over US tariff negotiations, including the potential imposition of new duties on semiconductors and pharmaceutical products – two key pillars of Singapore’s export base.
Meanwhile, Singapore’s re-exports had increased by 8.3 per cent, following the 14.2 per cent expansion in the previous quarter. The growth in non-oil re-exports was mainly due to higher shipments of both electronics and non-electronics.
Re-exports of electronic products rose by 14.4 per cent year on year in the first quarter of 2025, easing slightly from a growth of 16.4 per cent in the previous quarter.
The increase was primarily driven by stronger re-exports of parts of personal computers, which surged by 263.4 per cent, integrated circuits, which rose by 7.8 per cent, and telecommunications equipment, which increased by 20.9 per cent.
Non-electronic re-exports also registered growth, rising by 1.2 per cent in Q1 2025, though this marked a moderation from the 11.8 per cent expansion recorded in the fourth quarter of 2024.
Key contributors to this growth included higher re-exports of copper, which surged by 396.4 per cent, non-electric engines and motors, up by 16.8 per cent, and specialised machinery, which increased by 12.8 per cent.
Re-exports to Singapore’s top 10 markets as a whole expanded in the first quarter of 2025. The strongest contributors to this growth were Taiwan, which surged 125.7 per cent; the US, which increased by 53.3 per cent; and Vietnam, which rose by 25.9 per cent.
Trade performance
Singapore’s total merchandise trade expanded by 4.9 per cent year on year in the first quarter of 2025, moderating from the 6.8 per cent growth recorded in the previous quarter.
Total exports rose by 3.6 per cent, compared to 5.1 per cent in Q4 2024. This was supported by a 6.7 per cent increase in non-oil exports, even as oil exports declined by 10 per cent. Total imports grew by 6.4 per cent, easing from the previous quarter’s growth of 8.7 per cent.
On a year-on-year basis, Singapore’s total services trade increased by 3.8 per cent in Q1, moderating from a 7.4 per cent growth in Q4 2024.
Services export and imports rose by 4 per cent and 3.7 per cent, respectively. The growth in services exports was driven mainly by higher receipts from financial services, which increased by 7.7 per cent; other business services were up 3.7 per cent; and transport services, which grew by 2.1 per cent.
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