Singapore trade hits historic high in 2004 but growth to ease in 2005
Singapore trade hits historic high in 2004 but growth to ease in 2005
Agence France-Presse/Singapore
Singapore's key non-oil domestic exports (NODX) rose 17 percent in 2004 and total trade reached a historic high but growth will moderate this year, the city-state's trade agency said on Monday.
Total trade rose 22 percent to a record S$580 billion (US$345 billion) in 2004 thanks to the strong economic recovery in the United States, Japan and European Union and robust global electronics demand.
The NODX expansion in 2004 was an improvement over 15 percent the year before but 2005 is expected to be a "year of consolidation" for the overall trade performance, International Enterprise (IE) Singapore said in a statement.
NODX for all of 2004 reached S$132.8 billion.
In December 2004, NODX -- regarded as the best measure of Singapore's trade performance -- expanded 8.0 percent compared with a year earlier, which was within economists' forecasts.
"All top 10 NODX markets recorded strong positive growth in 2004," IE Singapore said, with exports to China, Hong Kong, the EU, South Korea and Australia maintaining double-digit growth rates.
"More notably, NODX to Malaysia and the U.S. recovered from the contraction in 2003 to post growth of 12 percent and 6.4 percent respectively for the year," the agency said.
The EU, United States and Malaysia are Singapore's top three export markets.
In 2004, the EU accounted for the highest share of Singapore exports at 19.9 percent, closely followed by the United States on 17 percent. China and Hongkong had a combined share of 16.8 percent.
The government expects NODX growth to moderate to 6.0 to 8.0 percent in 2005 on the back of weaker global electronics demand and high oil prices, while growth in total trade would slow to 7.0 to 9.0 percent.
IE Singapore chief executive Lee Yi Shyan said the consensus was for flat growth in electronics exports, which account for just over half of NODX.
"I think the rates given to us by various export sources are flat, meaning plus or minus two percent," he said.
"On the whole, we are cautiously optimistic about 2005."
The volatile pharmaceuticals sector may not be able to offset the weakness in electronics, Lee said, as its contribution to growth usually lags.
For 2004, however, Lee said the sector performed particularly well because it was a "harvest year" for the pharmaceutical plants that were set up earlier.
IE Singapore research and statistics division manager Rebecca Loh said no new production facilities are expected to be built in Singapore this year and that may be a "limiting factor" for export growth in 2005.
Howerver, non-electronic exports are expected to take up the slack amid expectations that global demand for electronics will be softer until the second half of 2005.
IE Singapore said its forecasts assume a weaker U.S. dollar, a stronger euro and crude oil prices ranging between $40-$42 dollars per barrel.