Persistently high inflation may continue to hound exports

Slower global demand is also one of the downside risks to exports.

The non-oil domestic exports (NODX) in February 2023 declined 15.6% year-on-year (YoY), lower than the 25% decrease in January because of subdued shipments to EU, Hong Kong, and Taiwan, said CGS-CIMB economists.

Singapore’s exports to the US, China, Japan, and Thailand, meanwhile, improved, CGS-CIMB said. 

Despite shipment improvements, exports will remain weak in the first half of 2023, and the economy forecast for 2023 is still at 2% YoY.

NODX shipments of both electronics and non-electronics fell overall, whilst NODX to the EU is expected to remain low amid recession concerns and headwinds. 

Overall, CGS-CIMB sees that there are major risks to Singapore's trade performance due to slowing global demand, geopolitical uncertainties, and persistently high inflation.