SINGAPORE, May 17 (Bernama) -- Maybank Research of Singapore has downgraded its 2023 non-oil domestic exports (NODX) forecast for the republic to between -9.0 per cent and -6.0 per cent from -7.0 per cent to -4.0 per cent, “given the worse than expected performance in the first four months of the year.”
Analysts Chua Hak Bin and Lee Ju Ye said the boost from China’s reopening “remains elusive as its recovery has largely been driven by domestic services, while manufacturing remains subdued.”
Government agency Enterprise Singapore (EnterpriseSG) earlier today announced that on a yearly basis, NODX for Singapore fell by 9.8 per cent in April 2023, following the 8.3 per cent decrease in the previous month with both electronics and non-electronics declined.
Maybank analysts expected the first quarter of Singapore's gross domestic product (GDP) to come in at 0.1 per cent, weighed down by the decline in manufacturing of -5.6 per cent and external-oriented services, namely wholesale trade, water transport, and finance and insurance.
“Singapore may slip into a technical recession if the boost from China’s reopening fails to materialise in the second quarter,” Maybank said in a research note today.
A technical recession is defined as two consecutive quarters of contraction.
“The probability of a recession in Singapore in the next 12 months, as predicted by the US treasury spread, rose to 36.7 per cent in April from 30.2 per cent in March,” the research house noted.
“We maintain our 2023 GDP growth forecast at 0.8 per cent, which factors in weaker performance in externally-oriented sectors that will offset the resilience in construction and tourism-related sectors such as accommodation, air transport, and food services,” it said.
The research outfit expects Singapore’s Ministry of Trade and Industry to downgrade its 2023 GDP growth forecast range to between -0.5 per cent and 1.5 per cent from 0.5 per cent to 2.5 per cent and to cut its NODX forecast substantially from the current -2.0 per cent to 0 per cent range.
On a yearly basis, Singapore's total trade declined by 18.8 per cent in April 2023 where total exports declined by 18.1 per cent and total imports contracted by 19.5 per cent.
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