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Singapore downgrades 2023 trade forecasts after Q1 exports slump worse than expected

The Republic now expects Nodx to shrink by 8 per cent to 10 per cent. PHOTO: ST FILE

SINGAPORE – Singapore cut its 2023 growth forecasts for key non-oil domestic exports (Nodx) and total merchandise trade, which includes oil, amid a sharp downturn in the global electronics sector that has weighed on manufacturing in Asian economies.

This comes after both Nodx and total merchandise trade came in worse than expected in the first quarter. Nodx shrunk by 16.2 per cent year on year, extending the 14 per cent decline in the fourth quarter. Meanwhile, total merchandise trade fell by 7.8 per cent, sharper than the 1 per cent dip previously.

The Republic now expects Nodx to shrink by 8 per cent to 10 per cent, and total merchandise trade to decline by 6 per cent to 8 per cent, dragged down by the manufacturing downcycle and lower oil prices.

This pales against its previous forecast of minus 2 per cent to 0 per cent growth.

Exports of electronics declined for the third straight quarter in January to March, while non-electronics decreased for the second consecutive quarter, said Enterprise Singapore (EnterpriseSG) on Thursday. 

Domestic exports of electronic products contracted by 25.2 per cent in the first quarter, picking up pace from the 15.9 per cent drop in the fourth quarter. Integrated circuits, disk media products and parts of PCs contributed to most of the decline.