On Monday (17 Feb), Singapore announced that its January’s non-oil domestic exports fell even as its growth forecast for 2020 was revised downwards partly due to the Covid-19 epidemic.
Based on the official data, exports fell 3.3 per cent in January after December’s 2.4 per cent expansion, which was preceded by nine months of contraction.
Growth projection for the rest of 2020 was revised downwards by the trade agency Enterprise Singapore (ES) to -0.5-1.5 per cent. This new revision is lower than the initial forecast of 0-2 per cent.
ES stated that the initial forecast was “premised on a modest pickup in global growth, along with a recovery in the global electronics cycle”.
Singapore’s main trading partners, especially China have been affected by the Covid-19 outbreak, ES added and “this may dampen the growth prospects of affected countries, if China’s growth comes in lower than earlier expected, with a knock-on impact on regional economies, through lower import demand, as well as supply chain disruptions and weakened consumer and business sentiments.”
Total trade and oil trade of the country both will be affected by the lower oil prices. ES noted that “the Energy Information Administration projected weakened global demand in the first quarter of 2020, in part reflecting the effects of the COVID-19, compared to the previous update,”
In January, exports fell due to electronic exports declining by 13 per cent compared to December at 21.3 per cent, according to ES. The main cause of decline was the fall in shipments of telecommunications equipment, integrated circuits and personal computers by 25.1 per cent, 20.5 per cent and 32.3 per cent each.
As for non-electronic exports, they declined a bit by 0.1 per cent, compared to the 11.5 per cent growth in the preceding month. The main cause of decline in non-electronic shipments is the fall in electrical machinery (-28.3 per cent), petrochemicals (-23.2 per cent) and pharmaceuticals (-5.5 per cent).
ES noted that exports to most of Singapore’s top markets fell, but not to Taiwan, US, South Korea and China. Shipments to Hong Kong, Indonesia and the EU declined by 40.9 per cent, 22.6 per cent and 10.5 per cent each respectively.
In January, total trade fell by 3.1 per cent on a year-on-year basis following a 0.7 per cent growth in December last year.
Comparing 2019, 2018 and 2017, total merchandise trade fell by 3.2 per cent to S$1 trillion in 2019, S$1.1 trillion in in 2018 and S$967 billion in 2017. The main cause of decline was the 13.9 per cent contraction in oil trade amidst the cheaper oil prices compared to 2019, ES stated.
Following a 4.2 per cent growth in 2018, non-oil domestic exports fell by 9.2 per cent in 2019 as a result of lower shipments of non-electronic and electronic products, ES further added.
After the 5.5 per cent decline in 2018, electronic shipments fell by 22.5 per cent in 2019. As for non-electronic exports, there was an 8.2 per cent growth in 2018 followed by a 4.5 per cent contraction in 2019.
As for non-oil exports which consist of both exports and re-exports, there was a 6.5 per cent growth in 2018, followed by a 1.9 per cent fall year-on-year in 2019.