SINGAPORE: Singapore has cut its export forecasts for 2020, no thanks to the impact of the novel coronavirus outbreak on key trade partners, as well as the drag from lower oil prices.
Year-on-year change in non-oil domestic exports (NODX) is expected to range between a 0.5 per cent drop and a 1.5 per cent rise this year, trade agency Enterprise Singapore (ESG) said on Monday, down from its earlier projection of zero to 2 per cent growth.The latest downgrade comes even as NODX clocked a slower pace of decline in Q4 2019 - easing to 5.7 per cent, from a fall of 9.6 per cent in the three months prior - on slightly gentler drops in both electronics and non-electronics shipments.
On a seasonally adjusted quarter on quarter (q-o-q) basis, NODX ticked up by 0.7 per cent in Q4 2019 - a tad slower than the 1.3 per cent growth in Q3 2019 - with a lift from electronic shipments reversing the previous quarter’s decline to improve by 0.8 per cent on a seasonally adjusted q-o-q basis.
But ESG’s earlier growth forecast in November 2019 had been “premised on a modest pickup in global growth, along with a recovery in the global electronics cycle in 2020”, the agency noted on Monday.
“Since then, the Covid-19 outbreak has affected China - our top trade partner, Singapore and many countries globally. 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.
“In addition, lower oil prices are expected to weigh on our oil trade in nominal terms and in turn total trade in 2020,” ESG added, pointing to international projections of weaker global energy demand in Q1 2020, partly because of the virus outbreak.
Exports to almost all of Singapore’s top 10 markets were down in 2019, with the exception of the United States, according to ESG data.