ANN/THE STRAITS TIMES – Singapore’s non-oil domestic exports (Nodx) exceeded market expectations in December 2024, marking a second consecutive month of growth. However, analysts warn of potential challenges ahead as concerns over a possible revival of Trump-era tariffs loom large.
According to Enterprise Singapore, Nodx grew by nine per cent year-on-year in December, building on November’s 3.4 per cent increase. Analysts surveyed by Bloomberg had forecast a 7.8-per-cent rise. On a seasonally adjusted basis, month-on-month shipments expanded by 1.7 per cent, a more modest pace compared to the robust 14.7 per cent growth seen in November.
Economists Chua Hak Bin and Brian Lee of Maybank Investment Banking Group attributed the recent surge in exports to preemptive stockpiling by Chinese firms. “Front-loading of shipments in anticipation of Trump 2.0 tariffs has bolstered Nodx growth, particularly in electronics exports to China, Hong Kong, and Malaysia, which play key roles in semiconductor assembly and testing,” they noted.
The export recovery in the final months of 2024 provided a boost but fell short of lifting full-year Nodx growth to the government’s target of around one per cent. Looking ahead, OCBC Bank chief economist Selena Ling projected Nodx growth in 2025 to range between two per cent and four per cent, supported by a low base from 2024 and Singapore’s free trade agreement with the United States (US), which could mitigate tariff-related risks.
The official forecast for 2025 Nodx growth stands at one per cent to three per cent, reflecting cautious optimism amid a challenging global trade environment.
Ling said the key uncertainty is the timing and magnitude of fresh tariffs that may come into play once US president-elect Donald Trump takes office on January 20 and how much this may impact China and ASEAN economic and trade growth prospects. “In particular, would Trump’s tariff threats kick in fairly quickly from January or later in the year, and would it be at 60 per cent for China, and 10 per cent to 20 per cent on the rest of the world or is there room for negotiation and deal-making?” she added.
There could also be indirect effects from potential trade retaliation, market sentiment and a sharper growth slowdown in China that could hurt Chinese demand for ASEAN’s goods and services, she said.
DBS Bank economist Chua Han Teng said in the near-term, Singapore’s good Nodx performance could still continue in early 2025, potentially supported by more front-loading of shipments.
“Looking beyond the near term, escalating geopolitical tensions and a potential wider trade war under a second Trump administration pose medium-term challenges and downside risks to highly trade dependent Asian economies including Singapore,” he added.
Maybank’s Dr Chua and Lee said that Singapore’s FTA and bilateral trade deficit with the US suggests that Singapore is a less likely Trump target.
But they still expect 2025 full-year export growth to weaken as global trade is hit by increased protectionism.
“Nonetheless, we expect that frontloading of shipments and shifting supply chains to South-east Asia will continue to drive manufacturing and export growth in the initial months of 2025, as Trump’s tariff threats on Chinese shipments will likely be rolled out in a phased manner,” they said. Year on year, electronics exports expanded 18.6 per cent in December, after a 23.1-per-cent rise in the previous month.
Within this segment, exports of integrated circuits, also known as chips or semiconductors, increased by 23.4 per cent. Personal computers grew 83.6 per cent, and disk media products expanded 44 per cent.
