Singapore upgrades 2022 export forecasts on better-than-expected Q1 showing and higher oil prices

The Business Times 25 May 2022 Share
SINGAPORE is upgrading its forecast of its key exports in 2022 on the account of better-than-expected first-quarter performance and higher oil prices expected to support oil trade, Enterprise Singapore (Enterprise SG) said in its quarterly trade review on

Total merchandise trade is now expected to growth 8-10 per cent, while the outlook for non-oil domestic exports (NODX) is 3-5 per cent.

The outlook for both, as recent as February, was maintained at 0-2 per cent, “considering that the pace of growth is likely to moderate from the high base in 2021, in line with the global economic and trade outlook”, said Enterprise SG.

This is because key growth drivers, such as the electronics trade, were expected to ease this year, while external uncertainties, including the Covid-19 pandemic and supply chain disruptions, remained.

Since then, both indicators outperformed expectations in Q1, the agency said.

“Supportive factors such as higher oil prices driving oil trade growth in nominal terms and in turn total trade, as well as robust global semiconductor demand are likely to continue in 2022, supporting exports of electronics and related specialised machinery and NODX growth,” Enterprise SG said

The agency noted that oil prices are tipped to stay above US$100 per barrel this year, while global semiconductor revenue projections are higher than before.

At the same time, most of Singapore’s key trade partners - China, the US, the euro zone, and Asean-5 - are expected to grow despite downgraded growth forecasts as a result of the Russia-Ukraine war, it added.

The forecast upgrade follows a 20.8 per cent year-on-year growth in merchandise trade in Q1, extending the previous quarter’s 28.8 per cent growth, according to data from the agency.

Non-oil trade rose by 16 per cent, easing from the the 20.8 per cent expansion in Q4.

Meanwhile, oil trade surged 48.2 per cent in Q1 on the back of higher oil prices, following the 86.1 per cent jump in the previous quarter.

NODX grew 11.4 per cent, lower than Q4’s 20.1 per cent growth. Non-oil re-exports (NORX) expanded by 17 per cent in Q1, compared with the previous quarter’s 20.8 per cent expansion.

Total services trade grew 6.8 per cent year on year, easing from Q4’s 10.6 per cent growth.

On a seasonally-adjusted quarter-on-quarter basis, total merchandise trade rose 5.1 per cent in Q1, easing from the previous quarter’s 9.3 per cent growth. Oil trade rose by 5 per cent during the same period, while non-oil trade, 5.1 per cent.

On the whole, both NODX and NORX to Singapore’s top 10 markets rose in Q1. For NODX, the biggest contributors to growth were the US, the European Union and China, while exports to Hong Kong, South Korea and Thailand declined.

The Business Times 25 May 2022