Singapore's NODX growth projected to slow down to 6.7% in 2018

How will GDP growth be affected by the moderation?

Singapore’s stellar exports performance in 2017 is starting to lose pace as exports of integrated circuits, computer parts, and printed circuit board (PCB) parts slumped before the year ended.

NODX growth is now projected to moderate to 6.7% this year, a measly 2.1ppt slide from 2017’s 8.8% in 2017, according to a report from CIMB.

Further, CIMB noted that the looming moderation in non-electronics NODX growth could be traced to weakness in petrochemicals (-0.6% yoy in Dec vs. +4.3% yoy in Nov) and electrical circuit apparatus (-8.7% yoy in Dec vs. +3.8% yoy in Nov).

“Shipments of specialised machinery slowed further to 6.6% yoy in Dec (+8.4% yoy in Nov), after recording strong gains exceeding 40% in Nov 2016-Jun 2017. On the other hand, exports of pharmaceutical products improved 7.0% yoy in Dec (+3.2% yoy in Nov),” CIMB said.

Should analysts be worried? CIMB said economists can still sleep at night as GDP growth is still expected to be at 3.6% this year, and will not be affected by the receding changes in NODX growth, provided that other domestic sectors increase in performance, and if the Monetary Authority of Singapore (MAS) adjusts the activity of the S$ NEER.