SINGAPORE (Dec 18): RHB Research is expect real export growth to moderate to 3.9% in 2018 and 3.6% in 2019, after Singapore’s non-oil domestic exports (NODX) contracted by 2.6% y-o-y in November.
“The dimmer outlook for the advanced and regional economies will likely translate to a more modest external environment for Singapore,” says RHB’s Singapore research team in a Monday report.
While global demand is still expected to expand, RHB says the rate of growth next year is likely to be “less assertive”.
Singapore in November saw its NODX dragged down by lower non-electronic exports. Non-electronic NODX fell by 5.2%, while petrochemicals contracted further by 7.8% during the month.
Trade data was also pulled down after record growth in pharmaceutical shipments over the last four months normalised in November.
In addition, RHB says weak Chinese demand has dampened trade. “Exports to China contracted for the seventh consecutive month, although the rate of decline was slightly smaller. The weaker demand pointed to China’s softening growth as it winds down economic excesses fuelled by cheap credit,” it adds.
On the positive side, electronics NODX saw a turnaround after 11 consecutive months of decline, and registered growth at 4.5% in November. This was led by an increase in shipments of integrated circuits, consumer electronics and telecommunications equipment.
“Positive growth in electrical & electronics (E&E) shipments could be the indicating factor that the sector is recovering and demand could be returning,” RHB says. “However, we project that growth will likely remain modest as there is still a lack of impetus for the industry to take off.”