Singapore's NODX: A Bright Spot in 2025

Singapore's Non-Oil Domestic Exports (NODX) are expected to grow by 2.0% year-on-year (YoY) in 2025, according to RHB. This projection aligns with the global trade recovery, with expectations of 1.0% to 3.0% growth, and is consistent with the World Trade Organization's (WTO) projections for global merchandise trade expansion. The electronics, precision engineering, and transport engineering sectors are expected to drive this growth.



Singapore's economic growth outlook in 2025 is likely to be dynamic, but with considerable downside uncertainties, after a strong performance in 2024. The country's trade-related sectors are expected to remain resilient, at least in early 2025, while modern services and construction should continue to underpin overall economic growth. However, intensification of geopolitical and trade tensions is the biggest downside risk to this outlook.

Despite the optimistic outlook, RHB noted that geopolitical uncertainties, particularly related to US trade policies under a potential "Trump 2.0" administration, could pose significant challenges to Singapore's trade-dependent economy. Rising protectionism and the possibility of a broader trade war could disrupt regional supply chains, with a recessionary scenario estimated to have a 30% probability, potentially impacting growth and investment sentiment.

RHB also noted export performance in December 2024 showed strong growth to the US (30.7% YoY), Taiwan (50.8% YoY), and Malaysia (24.2% YoY), reversing previous declines. However, exports to China and Europe continued to decline due to ongoing economic and policy uncertainties.

Meanwhile, electronics exports grew 18.6% YoY in December 2024, driven by integrated circuits (+23.4%), disk media products (+44.7%), and computer peripherals (+83.6%). Non-electronics exports rebounded by 6.6% YoY, with notable increases in non-monetary gold (+67.6%), food preparations (+61.5%), and specialized machinery (+19.9%).

In conclusion, Singapore's NODX is expected to grow by 2.0% YoY in 2025, driven by the electronics, precision engineering, and transport engineering sectors. Despite downside risks from geopolitical tensions and trade uncertainties, the country's economic growth outlook remains dynamic, with trade-related sectors and modern services expected to contribute to overall growth. Investors should monitor these developments and consider allocating a portion of their portfolio to Singapore's NODX-related sectors to capitalize on this growth potential.