Middle East tensions threaten Singapore export outlook: CGS

CGS keeps 2.9% NODX forecast.

Rising Middle East tensions could threaten Singapore’s non-oil domestic export growth this year even as shipments still rose 4.0% in February, according to CGS International.

The research house said any escalation in the US-Iran conflict could disrupt key shipping routes, raise freight costs, extend transit times, and weaken export volumes for trade-dependent Singapore. It added that higher oil prices could lift inflation and slow growth in major markets, hurting external demand.

CGS said electronics exports, which have been driving non-oil domestic exports (NODX) growth through semiconductor and AI-linked demand, would be particularly exposed if tensions worsen. Even so, it kept its 2026 NODX growth forecast at 2.9%, within Enterprise Singapore’s 2.0% to 4.0% range.

February export growth slowed from 9.2% in January and marked the weakest pace in six months as non-electronics exports fell 6.1%, dragged down by weaker shipments of non-monetary gold, food preparations, and petrochemicals. Electronics exports still climbed 43.2%, supported by integrated circuits, disk media products, and personal computers.

CGS said East Asia remained the main support for Singapore’s exports, with strong integrated-circuit shipments to South Korea, Taiwan, and Hong Kong, whilst exports to the US fell for a third straight month and shipments to Indonesia declined for a fourth consecutive month. Singapore’s trade surplus narrowed to $5.8b in February from $14.1b in January as imports rose faster than exports.

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