NODX full-year growth may exceed 6%: analyst

But low oil prices and the volatility of safe-heaven demand may weigh on expansion.

Singapore’s non-oil domestic exports (NODX) may see a full-year growth of more than 6% YoY, given the strong run it has shown based on August data, according to a report by OCBC Treasury Research. This is higher than Enterprise Singapore’s forecast of a 3-5% YoY full-year growth.

Already, NODX expansion is at 5.9% YoY year-to-date.

Electronics and non-electronics NODX chalked up a growth of 4% and 6.5% YoY, respectively.

Further, low-base NODX prints seen in Q4 2020 should inject futher support for NODX growth for the rest of the year, according to Selena Ling, head of treasury research and strategy, global treasury, OCBC Bank.

In a separate note, the UOB Global Economics & Markets Research team shared a more moderate expectation of a 4% full-year growth, which puts it at the middle of Enterprise Singapore’s revised outlook of 3-5%.

Pharmaceutical exports are forecasted to continue to shine for the rest of 2020, led by the uncertainty surrounding the COVID-19 pandemic, added UOB economist Barnabas Gan.

On the flipside, low oil prices are expect to say especially with OPEC’s downgrade of global oil demand to 90.2 million barrels per day (mbpd) in2020, which could nject further softness in Singapore’s petrochemical NODX, noted Gan.

“All-in-all, the level of uncertainty surrounding the COVID-19 pandemic amid heightened geopolitical-led concerns remains significant, and will continue to cloud Singapore’s trade prospects,” Gan said, on UOB’s decision to keep their growth forecast at a 4% expansion.

“Moreover, the rise in safe-haven demand, which led non-monetary gold exports surging by 55.1% YoY in July, may be highly volatile as well,” he added.