SINGAPORE: The growth for Singapore’s key exports in 2024 could come in at the “lower range” of the 4 to 6 per cent forecast given the worse-than-expected performance in the first quarter.
Singapore’s non-oil domestic exports (NODX) declined by 3.4 per cent in the first quarter from a high base a year ago, largely driven by a decline in non-electronics, Enterprise Singapore (EnterpriseSG) said on Thursday (May 23).
Domestic exports of non-electronic products saw a 3.8 per cent year-on-year decline in the first quarter of 2024, after a 1.1 per cent growth in the previous quarter.
The largest contributors to the decline in non-electronic products were pharmaceuticals, structures of ships and boats, and electrical circuit apparatus, EnterpriseSG in a media release on Thursday.
For electronic products, domestic exports decreased by 1.6 per cent on a year-on-year basis in the first quarter of the year, easing from the 9.9 per cent decline in the previous quarter.
Telecommunications equipment, diodes and transistors and parts of PCs contributed the most to the decline in electronic NODX.
NODX to the top markets as a whole declined in the first quarter, although NODX to China and Hong Kong rose, said EnterpriseSG.
The biggest contributors to the decline in NODX were the European Union with a 35.9 per cent contraction, the United States with a 13.2 per cent contraction and Japan with a 33.6 per cent contraction.
Meanwhile, total merchandise trade in the first quarter of 2024 grew by 4.8 per cent on a year-on-year basis, a turnaround from the preceding five quarters of decline. The previous quarter saw a decline of 2.1 per cent in total merchandise trade.
Oil trade grew by 3.4 per cent in the first quarter, after the 3.3 per cent decline in the fourth quarter of 2023.
Non-oil trade rose by 5.2 per cent in Q1 2024, after the previous quarter’s 1.8 per cent decrease.
Higher expected oil prices year-on-year are expected to support oil trade in nominal terms and in turn total trade, EnterpriseSG said.
Singapore has maintained its GDP growth forecast for the year at a range of 1 to 3 per cent as its economy grew by 2.7 per cent year-on-year in the first quarter of 2024, the Ministry of Trade and Industry (MTI) said on Thursday.
OUTLOOK
While the growth forecast for Singapore’s key exports in 2024 could come at the lower range of 4 per cent to 6 per cent, “support is still expected from the recovery in electronics demand in 2H 2024, driven by consumer devices and AI servers, alongside the normalisation of inventory levels”, EnterpriseSG said.
A net weighted balance of 40 per cent of firms in the electronics cluster projected positive business prospects for the April to September period, compared to the first quarter of 2024.
Global semiconductor revenue is also projected to be 17.4 per cent higher year-on-year in 2024, a turnaround from the 11.7 per cent decline last year.
In terms of global outlook, the International Monetary Fund (IMF) has projected that global economic activity will grow by 3.2 per cent in 2024.
Most of Singapore’s key trade partners, including China, the US, the EU, and ASEAN are projected to grow in 2024.
The IMF also projected higher world trade volume growth in 2024 than in 2023.
Meanwhile, the World Trade Organisation (WTO) expected global merchandise trade to grow by 2.6 per cent in 2024, reversing the 1.2 per cent decline in 2023.
