On August 13, 2024, Singapore announced a revised forecast for its Non-Oil Domestic Exports (NODX), now projecting growth between 4% and 5%, a decrease from the earlier estimate of 4% to 6%.

According to data from Enterprise Singapore (EnterpriseSG), NODX experienced a year-on-year decline of 6.4% in the second quarter, following a 3.4% drop in the first quarter. This downturn is attributed to a high comparison base from the previous year and a decrease in non-electronic NODX, primarily due to reduced pharmaceutical exports.

EnterpriseSG highlighted that key risks remain for the NODX outlook, notably a weaker recovery anticipated in the second half of 2024. Despite this, there is optimism for NODX growth driven by the recovery in the electronics sector, supported by high oil prices. The agency stated, “Support for NODX is expected to come largely from the electronics recovery, driven by demand in AI servers and consumer devices.”

Selena Ling, chief economist at OCBC, noted that the revised forecast was not surprising, considering NODX had contracted by 4.9% in the first half of the year. While she expects stabilization and recovery in the latter half, she cautioned that NODX may fall below 4%, particularly given challenges in the pharmaceutical sector.

DBS economist Chua Han Teng anticipates a “gradual and fragile recovery” in NODX during the second half of the year, aided by favorable base effects in the third quarter. He also pointed out uncertainties affecting Singapore’s export outlook, such as geopolitical conflicts disrupting supply chains and China’s uneven economic growth, alongside the effects of high-interest rates in the U.S.

Quarterly data indicates that NODX fell by 1.3% in Q2, following a 4.8% decline in Q1. Non-electronic exports dropped for the second consecutive quarter, while electronic NODX grew for the first time in eight quarters, marking a significant turnaround since Q3 2022. Specifically, domestic exports of electronic products increased by 3.8% year-on-year in Q2 after a 1.6% decline in the previous quarter.

Despite the declines, Singapore’s total merchandise trade grew by 10.1% year-on-year in Q2, up from 4.8% growth in Q1. EnterpriseSG has raised its growth forecast for total merchandise trade in 2024 to a range of 5% to 6%, compared to the earlier estimate of 4% to 6%.