Singapore’s December Exports Beat Expectations Despite Global Uncertainty
Singapore’s export performance in December 2024 surprised many, with a 9% increase in non-oil domestic exports (Nodx), continuing the positive trend from November. This growth signals a strong end to the year, especially considering the backdrop of trade tensions and economic uncertainties.
But as the world watches for any shifts under a potential Trump 2.0 presidency, analysts warn that challenges could lie ahead. The looming Trump tariffs could create volatility for Singapore’s export market, impacting trade relationships and economic growth in the months ahead.
December Exports Show Positive Momentum
In December 2024, Singapore’s Nodx—the key measure of non-oil exports—rose by 9% compared to the previous year, beating market expectations of a 7.8% rise. This marks the second consecutive month of growth, following a 3.4% increase in November, according to Enterprise Singapore.
While these figures show that Singapore’s economy is on an upward trajectory, with electronics exports continuing to perform well, the growth rate was more modest when compared to the previous month’s 14.7% jump.
The 2024 Full-Year Growth: Not as Strong as Expected
Despite a strong finish in the last two months, full-year growth for 2024 fell just short of expectations. Nodx growth for the year is expected to be just under 1%—a significant slowdown compared to the optimistic forecast of 4-5% earlier in the year. The government had downgraded its projection in November, attributing this to a slower-than-expected recovery during the second half of the year.
However, even with this modest full-year growth, experts point out that it’s still a major improvement over the 12.6% contraction in 2023. So, while growth was slower than expected, it’s a marked improvement after last year’s downturn.
The Uncertainty of Trump Tariffs: What’s Next?
Looking ahead to 2025, the biggest cloud hanging over Singapore’s trade outlook is the potential for new tariffs under the upcoming Trump presidency. With Donald Trump set to take office on January 20, 2025, experts are bracing for the impact of his trade policies, which could hit China and other parts of the world hard.
Selena Ling, chief economist at OCBC Bank, noted that the exact timing and magnitude of new tariffs are uncertain. However, she warns that tariffs as high as 60% on China and 10-20% on other countries could be in the cards. This would have a significant impact on global trade, particularly for Asian economies like Singapore, which are highly dependent on exports.
Analysts are also concerned about the potential for retaliatory tariffs, which could further complicate the global trade environment. Additionally, a slowdown in China’s economy could dampen demand for ASEAN exports, including those from Singapore.
What Does This Mean for Singapore’s Economy?
While the near-term outlook remains somewhat positive, the medium-term risks are significant. DBS Bank economist Chua Han Teng explained that early 2025 could still see strong Nodx growth, driven by firms front-loading shipments to avoid higher tariffs. However, as the year progresses, the ongoing trade war risks and geopolitical tensions could weigh on growth prospects.
Economists also anticipate that export volatility will likely increase in the first quarter, as businesses rush to get ahead of potential tariffs. This could result in more short-term fluctuations in Singapore’s export numbers.
Electronics Exports Lead the Way
Despite the overall concerns, electronics exports continued to shine in December. Integrated circuits (chips)—a core component of many electronic products—saw a significant 23.4% increase, while other segments like personal computers rose by an impressive 83.6%. This strong performance reflects the global tech upcycle, with rising demand driven by the growth of artificial intelligence (AI) applications and an ongoing replacement cycle for consumer devices.
In total, electronics exports grew by 18.6% in December, continuing the trend from November’s 23.1% rise. This performance has helped support the overall Nodx growth and is expected to continue playing a key role in Singapore’s export outlook for early 2025.
Non-Electronic Exports See Positive Growth
December also saw a solid performance from non-electronics exports, which rose by 6.6%, reversing a 1.6% decline in November. Key drivers included non-monetary gold, which jumped by 67.6%, and food preparations, which rose by 61.5%. Specialized machinery also posted strong growth, rising by 19.9%.
While pharmaceutical exports continued to show weakness, the overall positive trend in non-electronics was a welcome sign for Singapore’s export diversification efforts.
Trade Partners: Mixed Results
Singapore’s exports to key trading partners also painted a mixed picture. Exports to the United States surged by 30.7%, driven by strong demand for non-monetary gold and food preparations. Similarly, exports to Taiwan jumped by 50.8%, buoyed by demand for specialized machinery, measuring instruments, and personal computers.
However, exports to China and the eurozone declined. Exports to China fell as concerns about the trade slowdown and China’s economic growth weighed on demand. Meanwhile, exports to the eurozone dropped due to weaker demand in the region.
Exports to Malaysia rose by 24.2%, largely driven by higher shipments of chips and non-monetary gold.
Looking Ahead: Will the Growth Continue?
As we look to 2025, the outlook for Singapore’s exports remains uncertain, especially with the potential threat of new tariffs under a second Trump presidency. The key will be how quickly these tariffs are imposed and how businesses and trading partners react.
For now, electronics remain the backbone of Singapore’s exports, supported by strong demand from the global tech sector. But as the global trade landscape remains volatile, Singapore’s export performance in 2025 will depend on how it navigates potential disruptions from ongoing geopolitical tensions and the impact of any new tariffs.
In conclusion, while Singapore’s December export numbers showed positive growth, the risks of global trade tensions, especially with the US, could pose challenges in the months ahead. Nodx growth may still rise in 2025, but much depends on how the Trump tariffs unfold and how other countries respond to these trade shifts.
