Singapore raises 2021 trade forecasts again as exports grow 9% in Q3

SINGAPORE: Singapore raised its trade forecasts on Wednesday (Nov 24) amid a “better-than-expected” performance and robust global semiconductor demand in the third quarter of 2021.

Higher oil prices also supported the oil trade and in turn total trade, Enterprise Singapore (ESG) said in its review.

Non-oil domestic exports (NODX) could now grow by between 9.5 per cent and 10 per cent, up from the 7 per cent to 8 per cent forecast issued in August. This is the second upgrade from the 1 per cent to 3 per cent forecast issued in May.

ESG also increased its projection of total merchandise trade for a second time this year, adjusting it upwards to 17 per cent to 17.5 percent year-on-year, up from the previous 13 per cent to 14 per cent. The initial forecast was 5 per cent to 7 per cent.

ESG data showed that NODX grew by 9 per cent in the third quarter of 2021 on a year-on-year basis, following the 10.1 per cent rise in the second quarter. Both electronic and non-electronic exports rose in the quarter.

Electronic exports grew by 15.3 per cent year-on-year, extending the 15.7 per cent rise in the previous quarter. The biggest contributors to growth in the sector were personal computers, integrated circuits, and diodes and transistors, ESG said.

Non-electronic exports were up by 7.1 per cent, following an 8.5 per cent increase in the second quarter. Growth was led by specialised machinery, petrochemicals and pharmaceuticals.

NODX to the top markets as a whole grew in the third quarter of 2021, though exports to the United States and the EU 27 declined. The biggest contributors to the NODX growth were China, Taiwan and South Korea.

Total merchandise trade grew by 19.1 per cent in the third quarter, ESG also said in its review, down from the 27.3 per cent in the quarter before. Growth in first quarter of the year was 4.9 per cent.

Non-oil trade rose by 14.6 per cent while oil trade expanded by 50 per cent amid higher oil prices compared to a year ago, an extension of the 98.4 per cent increase in the preceding quarter.

On a quarter-on-quarter seasonally adjusted basis, total merchandise trade dipped by 0.2 per cent in the third quarter, after the 3.1 per cent rise in the second quarter. Oil trade edged up by 1.6 per cent, while non-oil trade saw a 0.5 per cent decline.

ESG issued a “cautiously optimistic forecast” of 0 per cent to 2 per cent growth for both total merchandise trade and NODX in 2022. Growth is expected to ease from a high base in 2021, the agency said.

The Ministry of Trade and Industry on Wednesday narrowed the country’s gross domestic product growth forecast for the year to 7 per cent, from the previous 6 per cent to 7 per cent.

This is based on the performance of the Singapore economy in the first three quarters of the year, as well as the latest external and domestic economic developments, said the ministry.

Singapore’s economy grew by 7.1 per cent year-on-year in the third quarter of 2021, beating expectations, but still slower than the 15.2 per cent growth recorded in the previous quarter.