Singapore’s 2024 key exports growth forecast trimmed on demand concerns

SINGAPORE (ICIS)–Singapore’s non-oil domestic exports (NODX) growth forecast for 2024 has been revised downward to 4-5%, Enterprise Singapore (EnterpriseSG) said on 13 August.

The forecast is down from its initial 4-6% projection amid external demand concerns.

• Support for NODX expected to come from electronics sector
• Q2 decline in NODX driven by 9.2% drop in non-electronic NODX
• GDP growth forecast for 2024 narrows to 2-3%

The adjustment comes as the country’s NODX fell by 6.4% year on year in the second quarter following a 3.4% decline in Q1, the government agency championing enterprise development said in a statement.

Singapore’s petrochemical exports rose by 14.9% year on year in the second quarter, extending the 0.7% expansion in the first three months of the year.

“Key downside risks remain for the NODX forecast, including a weaker-than-expected recovery in H2 2024, which could potentially lead NODX growth for the year to come in below the forecast range,” EnterpriseSG said.

The Q2 decline in NODX was largely driven by a 9.2% year-on-year drop in non-electronic NODX, primarily due to a significant decrease in pharmaceuticals exports.

Non-electronic NODX includes petrochemical shipments abroad.

Electronic NODX bucked the trend with a 3.8% year-on-year increase in the second quarter, after a 1.6% decline in the first three months of the year.

Support for Singapore’s NODX in the second half of 2024 is expected to come primarily from the electronics sector, driven by growing demand for artificial intelligence (AI) servers and consumer devices, EnterpriseSG said.

This optimism is bolstered by a revised upward forecast for global chip sales, now projected to increase by 19.2% in 2024, up from the previous forecast of 17.4%.

“In addition, a net weighted balance of 36% and 56% of firms in the electronics and pharmaceuticals clusters respectively forecast new export orders for the upcoming quarter,” EnterpriseSG added.

In its outlook, EnterpriseSG noted the International Monetary Fund’s (IMF) projection of a 3.2% growth in global economic activity for 2024.

“Most of Singapore’s key trade partners, including China, the US, the EU 27 and ASEAN-5 are projected to grow in 2024,” it said.

ASEAN-5 comprises the following Association of Southeast Asian Nations (ASEAN) member countries: Indonesia, Malaysia, the Phillippines, Thailand and Singapore.

On the trade front, the IMF forecasts a 3.1% increase in global trade volume for 2024, a significant improvement from the 0.8% growth in 2023.

The World Trade Organization (WTO) also projects a 2.6% expansion in global merchandise trade for 2024, reversing the 1.2% decline seen in 2023.

Separately, Singapore’s Ministry of Trade and Industry (MTI) on 13 August said the country’s GDP growth forecast for 2024 has been narrowed to 2-3%, versus the previous estimate of a 1-3% expansion.

The country’s economy expanded by 2.9% year on year in the second quarter, in line with its advance estimates released in July, bringing growth in the first half of the year to 3.0%.

Focus article by Nurluqman Suratman

Thumbnail image: Part of the Singapore city skyline, with Marina Bay Sands and the ArtScience Museum in the background. (Photo source: Wallace Woon/EPA/REX/Shutterstock)