Singapore August NODX likely to decline; sluggish global outlook to keep the pain alive

Singapore’s non-oil domestic exports (NODX) are likely to have declined during the month of August and the pain is expected to continue against a backdrop of sluggish global outlook and concerns of a slowdown in China.

The country’s NODX data, due to be released Friday is expected to register a decline of 5.4 percent. While this is an improvement from the drastic 10.6 percent plunge in the previous month, the point to note is that it is still stuck in the red zone. Indeed, nothing has changed in the external environment to warrant an improvement at this juncture.

The ongoing slowdown in China is the main concern. It is structural in nature and hence, is here to stay for a while. Sluggish growth in the United States, compounded with the risks of the Federal Reserve interest rate hike and the upcoming US election will continue to weigh down on the global outlook.

In addition, the uncertainties surrounding a post-Brexit Eurozone and a potent mix of downside risks to export performance and growth dampen the situation further. The next few months will be tough going for any export-dependent economy, including Singapore, DBS reported.