Will Singapore crack the $1trillion trade market in 2011 ?

If trade grows by 1 per cent over  the government forecast of 8 to 10 %, SIngapore will have made it into the elte club of nations whose trade exceeds US$1tn.

According to International Enterprise Singapore, NODX growth in 2011 is also revised upwards to between 8.0 and 10.0 per cent from the previous forecast of 6.0 to 8.0 per cent.

The key factors contributing to the revised outlook for 2011 are as follows:

The global economy is expected to register 4.4 per cent growth in 2011

The IMF, in its latest January 2011 World Economic Outlook Update, expects the global economy to grow by 4.4 per cent in 2011, revising upwards its previous forecast of 4.2 per cent growth. The upgrade in the forecast is due to better than expected economic activity especially in the second half of 2010.

Increase in private domestic demand in developed economies

Recent data show that private domestic demand in developed economies is slowly recovering. Consumer spending, which accounts for more than two-thirds of US economic activity, grew at 4.4 percent in the last quarter of 2010 - the fastest pace since the first quarter of 2006. This is a boost to export-led countries like Singapore.

Moderate growth in electronics demand

The growth in demand for global electronics is projected to be moderate in 2011 compared to 2010, due to the base effect of high sales in 2010. Global electronics demand is expected to increase by an average of 5 per cent in 2011 according to the forecasts of major semiconductor industry players and IT analysts. With the Asia-Pacific accounting for 54 per cent of the global semiconductor market, Singapore’s electronic NODX and NORX are expected to ride on this demand.

Growing oil prices

Oil prices have substantially increased in response to strong global demand and the uncertain political situation in the Middle East. Oil prices are now expected to be around US$90 to US$100 per barrel in 2011, compared to the previously expected US$80 to US$85 per barrel.