Singapore cuts key exports forecast for 2024 amid weaker-than-expected recovery

SINGAPORE: Singapore on Friday (Nov 22) cut its non-oil domestic exports (NODX) growth forecast for 2024 amid a weaker-than-expected recovery.

NODX in 2024 is now expected to grow by about 1 per cent year-on-year, down from the forecast in August of a 4 to 5 per cent expansion, said Enterprise Singapore.

“While the external environment is generally supportive of growth, uncertainties in the global economy such as a more challenging and competitive trade environment could weigh on global trade and growth,” it added.

OUTLOOK

At the last update, it was highlighted that downside risks, including a weaker-than-expected recovery in the second half of 2024 could potentially lead to NODX growth coming in below the forecast range.

That weakness has materialised, said EnterpriseSG, with NODX performing weaker than expected, primarily due to the volatile segments such as pharmaceuticals and ships and boats.

This has continued to weigh on the fourth quarter performance.

A net weighted balance of 8 per cent of firms in the pharmaceuticals segment forecast new export orders for the fourth quarter, down from 56 per cent in the previous quarter.

Electronic NODX performance also moderated in September (-0.7 per cent year-on-year) and October (2.6 per cent). This was compared to the double-digit growth in July and August, at 16.7 per cent and 35.1 per cent respectively.

EnterpriseSG noted that the International Monetary Fund has projected that global economic activity will grow by 3.2 per cent in 2025.

Most of Singapore’s key trade partners, including China, the US, the 27 member states of the European Union and ASEAN-5 (Indonesia, Malaysia, the Philippines, Singapore and Thailand) are projected to grow, it said.

“Similarly, on the trade front, the WTO (World Trade Organization) expects global merchandise trade to grow by 3 per cent in 2025, faster than the 2.7 per cent in 2024, although rising geopolitical tensions and economic policy uncertainty pose downside risks to its forecast,” said EnterpriseSG.