Singapore's Non-Oil Domestic Exports Fell in January: A Closer Look at the Key Factors and Implications

Singapore's non-oil domestic exports (NODX) experienced a surprising decline in January 2025, contracting by 2.1% year-on-year, according to data released by Enterprise Singapore. This unexpected downturn comes after a robust 9.0% increase in December 2024. The decrease in NODX was primarily driven by a 4.8% drop in non-electronics exports, while electronics exports grew by 9.6% (Enterprise Singapore, 2025).

Several factors contributed to the decline in non-oil domestic exports, aligning with broader economic trends in the region and globally:

1. Global economic slowdown: The global economy has been facing a slowdown, which can impact demand for various goods, including pharmaceuticals and machinery. This global trend is reflected in the MTI's projection of GDP growth for 2025, which is within the range of 1.0-3.0% (MTI, 2024).
2. Geopolitical tensions: Geopolitical tensions, such as those between the US and China, can disrupt supply chains and affect trade flows. The intensification of geopolitical tensions is identified as a significant downside risk to Singapore's economic outlook (Group Research - Econs, 2025).
3. Regional economic trends: The decline in exports to key markets like China, Indonesia, the EU, Thailand, and Malaysia suggests that regional economic trends may also be contributing to the decrease in NODX. For instance, the slowdown in China's economy can impact demand for Singapore's exports, as China is one of Singapore's top trading partners (Enterprise Singapore, 2025).

The decline in non-oil domestic exports has significant implications for Singapore's economy and investors. As Singapore's economy is heavily reliant on trade, any disruptions in export growth can impact overall economic performance. To mitigate the impact of geopolitical tensions and trade dynamics on its non-oil domestic exports, Singapore should focus on diversifying its trade partners and supply chains. By expanding its trade relationships with other countries and regions, Singapore can reduce its vulnerability to disruptions in key markets and maintain steady export growth.

In conclusion, the decline in Singapore's non-oil domestic exports in January 2025 was primarily driven by a decrease in non-electronics exports, aligning with broader economic trends in the region and globally. Geopolitical tensions, the global economic slowdown, and regional economic trends contributed to the downturn. To ensure future export growth, Singapore should focus on diversifying its trade relationships and promoting international cooperation to mitigate the risks associated with geopolitical tensions and trade dynamics. Investors should monitor the situation closely and consider diversifying their portfolios to mitigate risks and capitalize on opportunities in the electronics and non-electronics sectors.