Singapore’s non-oil domestic exports face bumpy recovery in H1: experts

Outlook for the second half looks rosy.

Singapore’s non-oil domestic exports (NODX) are expected to continue rebounding in the first half of this year although the path towards full recovery will remain challenging, experts said.

UOB said the electronics NODX will benefit from the low base last year, but the progress of recovery will still be impacted by external headwinds and the tight financial environment in the US and EU.

RHB in a separate note said it expects the NODX rebound to only gather speed in the second half of the year as global market conditions improve. It said global semiconductor demand has already shown signs of bottoming out last year and is headed for expansion this year. 

“Singapore, being a highly open and trade reliant economy, will benefit on a relatively rosier backdrop, should it persist into early 2024,” said Barnabas Gan, acting group chief economist at RHB. “We expect a broad-based recovery for Singapore’s NODX, especially in both electronics and non-electronics sectors.”

Data from Enterprise Singapore showed NODX slipped 1.5% year on year in December , reversing the 1% gain the month prior, pushing the full-year NODX to shrink by an estimated 13.1% last year – way steeper than UOB’s initial forecast of just a 12.5% annual decline for the sector

READ MORE: Non-oil domestic exports drop 1.5% YoY in December

RHB also expects US benchmark interest rates to go down in the second half of the year, which may also spur activity in externally-facing industries and benefit these sectors in Southeast Asia, including Singapore. 

UOB maintained that it still expects a 6% growth rate for NODX this year, higher than the official forecast range of 2% to 4% by Enterprise Singapore. Meanwhile, RHB gave a lower forecast of 3%.