Its contribution to GDP slipped by 10% in 5 years.
This chart from Morgan Stanley shows the declining trend in the percentage of non-oil domestic exports (NODX) to Singapore’s gross domestic product (GDP). It crashed to 40% in 2018 from its peak contribution of more than 70% in 2006. In just a span of five years, the figure fell by as much as 10%.
Singapore's NODX grew 1.1% in June which fell short of the target setby some economists. On a seasonally adjusted basis, it slipped 10.65% to $15.1b from $16.9b in May.
Despite NODX being lower than analysts’ expectations, CMC Markets sales trader Orianno Lizza thinks that NODX are in line with the specific areas of decline due to global downturns.
“Since the trade war began, electronics have been a targeted sector by the US,” Lizza commented. “This is also in line with weaker than expected GDP figures, which paints an eerie outlook for the Singapore economy.”
According to Enterprise Singapore, electronic NODX declined 7.9% YoY in June and slipped 7.8% MoM whilst non-electronic NODX grew 4.6% YoY in June which still fell short of the 26.2% expansion in May.
“The ongoing maintenance of trade relations and agreements with major local and global countries is key to Singapore’s growth,” Lizza said. “In addition to this, relaxing of corporate lending will aid the growth and development of Singapore businesses.”
He also thinks that private firms should look to station operations in major trade zones as a mark of intent to strengthen ties and grow exports in said regions.
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