Anticipated Decrease in Key Export Growth for Singapore in 2024

Singapore is expecting a slowdown in the growth of its key exports for 2024, with projections indicating that the growth will fall at the lower end of the forecasted 4% to 6% range. The decline in non-oil domestic exports (Nodx) by 3.4% to around billion in the first quarter of the year, following a 1.4% decrease in the previous quarter, has been primarily attributed to fluctuating pharmaceutical demand.

Enterprise Singapore (EnterpriseSG) has expressed concerns about the downside risks to the Nodx forecast, hinting that the growth might align with the lower range of the projected 4% to 6%. However, there is optimism for a rebound in electronics demand in the second half of 2024, driven by consumer devices and artificial intelligence servers.

Despite the sluggish start, it is noteworthy that the International Monetary Fund (IMF) predicts global economic activity to grow by 3.2% in 2024. Singapore’s key trade partners, such as China, the United States, Europe, and ASEAN countries, are also expected to experience growth. Consequently, EnterpriseSG maintains the 2024 growth forecast for both total merchandise trade and Nodx at 4% to 6%.

Ms. Selina Ling, Chief Economist at OCBC, has cautioned that the lower end of the 2024 forecast could be at risk, especially considering the weaker-than-expected 4.9% contraction in the first four months compared to 2023. Mr. Barnabas Gan, Acting Group Chief Economist at RHB Singapore, emphasized that key sectors supporting Singapore’s economy would include electronics, precision engineering, machinery, and wholesale trade.

In the first quarter of 2024, Singapore witnessed a decline in non-electronics shipments compared to the same period the previous year, following growth in the preceding quarter. Despite the challenges, there are hopes for a turnaround in the coming months with an expected resurgence in demand for certain key sectors.