Spoiler Alert: China’s lacklustre growth threatens upcoming NODX numbers

The city-state can’t rest on its laurels.

The recent growth of Singapore’s non-oil domestic exports, albeit slightly by 0.3%, has helped quell some fears that the island nation may continue to be bombarded by export contraction until the end of the year. However, the country can’t afford to be complacent.

According to Francis Tan of UOB, the on-going underperforming growth in China, Singapore's top exporting country, as well as the deflationary trend in commodities continue to threaten Singapore’s NODX in the coming months.

“We remain cautious about the export outlook and therefore maintain our 2015 NODX forecast of a 1% contraction,” Tan said.

On the other hand, Tan said the slight easing by MAS could help support the increasing export volume in the coming months.

“However, with Singapore’s relatively high import content that resides within its exports, the slower appreciation in the SGD NEER may have limited positive impact on final export demand,” Tan said.

“The more important aspect for us to observe a significant increase in exports will be income growth in our key exporting destinations, namely: China, Malaysia, Indonesia, and the US,” he added.