The current weakness in Singapore’s exports is likely to extend into the first half of 2021, following a weakening of global demand over the same period says RHB’s Singapore research team in a report dated Dec 21.
However, the team also sees that exports from the pharmaceutical sector could remain “resilient” based on its in-house assumption of a gradual global roll-out of the Covid-19 vaccine in 2021, says the team.
For more stories about where the money flows, click here for our Capital section
“As a result, we foresee resilient demand for active pharmaceutical ingredients (API) and medical equipment in 1H 21. The electronics sector could weaken in 1H2021 as global demand for semiconductors softens once the November and December holiday effect for goods demand declines in the near-term,” it adds.
On Dec 17, Singapore’s non-oil domestic exports (NODX) remained in the red for the month of November, with a print of -4.9% y-o-y compared to Bloomberg consensus estimates of 0.3% y-o-y.
SEE:Singapore's NODX edges up by 5.9% thanks to strong electronic exports
“The previous core contributors to NODX growth in 1H2020 – petrochemicals, pharmaceuticals and non-monetary gold, have posed weaker growth towards end of the year. Similarly, exports for electronic products continued to falter due to base effects and a slight slowdown in demand from the city-state’s main markets,” notes the team, who warns that the slow-down in Asian exports is already “at our door step”.
The team has thus maintained its 2020 GDP forecast at -6.0% y-o-y followed by a rebound to 5.5% y-o-y in 2021.
“We expect exports to improve in 2H2021 due to a modest pick-up in global demand, particularly from the US and China,” it adds.
