Shipments to China may improve but later than expected: analyst

CGS-CIMB said the improvement may come in the second quarter.

As the recent exports figures were mainly dragged by shipments to China, CGS-CIMB sees that the exports to China may be enhanced due to reopening but it will take time.

Recent government figures showed that non-oil domestic exports (NODX) were down in December, falling 20.6% from a high base a year ago.

There are still cautious moves due to infections, which will make the exports progress in the second quarter of 2023.

For other markets, exports to US and Europe will remain low as expectations for a recession grew concern about weakening international demand.

“We believe that this will moderate Singapore shipments to the EU and the US. Furthermore, this could impede higher growth of NODX in 1Q23, as China, the US and Europe continue to be the largest markets for Singapore NODX in 2022,” the analyst said. 

Exports at a downward trend

Amongst the major risks to Singapore trade are fears of recession, uncertainties from geopolitical developments, and high inflation in some advanced economies, said CGS-CIMB.

RHB said NODX will contract in the first half of 2023 but it will bounce back in the second half of the year because of economic revival in China.

“We adopt a cautious outlook on Singapore’s trade prognosis given the ongoing global economic headwinds. However, China’s reopening of its borders may help, especially in 2H23,” said RHB.