Non-oil domestic exports (NODX) decreased 11.2% year-on-year in July, weaker than June’s 17.4% plunge (previously reported: -17.3% year-on-year). Nevertheless, the decline beat market expectations of a 15.2% fall. On a month-on-month seasonally-adjusted basis, NODX increased 3.7% in July, contrasting June’s 7.8% contraction.
July’s result was driven by softer declines in both electronic and non-electronic NODX. Moreover, consumer electronics NODX accelerated in July year-on-year, while electrical machinery and petrochemicals NODX fell at weaker rates. In contrast, the volatile pharmaceuticals sector declined at a sharper pace. In terms of markets, demand from Japan, Malaysia and Hong Kong contracted the most, while demand from the U.S. accelerated in July.
July’s deterioration in NODX comes as heightened U.S.-China trade tensions and weaker global demand for technology weighs on external demand for Singaporean goods. The disappointing trade figures, coupled with tepid inflationary pressures and the economic stagnation in Q2, will likely lead the MAS to consider a more expansionary monetary policy stance at the next meeting in October this year.
FocusEconomics Consensus Forecast panelists saw overall nominal exports contracting 4.6% and imports shrinking 4.1% in 2019, with the trade surplus totaling USD 92.1 billion. For 2020, panelists saw exports and imports growing 0.3%, with the trade surplus reaching USD 92.2 billion.