Cities with economies specialized in particular industries, such as Singapore, Hong Kong and, to some extent, Mauritius until the last few decades, are more susceptible to changes occurring around the world. Singapore is as dependent on the oil and gas industry as it is on its role as a financial center. Any financial crisis will cause a painful economic slowdown and the loss of many jobs. This cycle occurs quite often. Due to climate change and shifting political arenas, Singapore’s oil and gas industry may eventually come to an end.
In December 2022, Singapore’s National Non-Oil Exports (NODX) fell 20.6% annually, with declines in electronics and non-electronics being the main contributors. Seasonally adjusted month-over-month, NODX fell 3.3% in December after falling 9.2% in November. According to OCBC economist Selena Ling, full-year NODX growth in 2022 was 3.5%, the smallest annual increase since 2019. Exports increased 4.4% in 2020 and 12.5% in 2021.
In December, non-domestic oil shipments to Singapore’s top 10 markets declined across the board, with exports to China and Indonesia seeing falls of more than 30%. But exports to Japan and South Korea experienced growth of 6.8% and 14.3%, respectively.
According to Ling, the COVID situation in China, particularly the caution around the reopening announcement in early December, weighed on economic operations, which is evident in the damped NODX of specialized machinery, medicines and primary chemicals to China.
Given concerns about a global recession, he noted, NODX in the first quarter of 2023 is anticipated to be dismal, declining as much as 17% year-over-year.
Singapore’s economy
Singapore’s economy will continue to be heavily influenced by both domestic and international influences.
The importance, involvement and participation of international initiatives such as One Belt, One Road, TPP correction and global trade agreement. All this will significantly affect Singapore.
As the hub between East and West, how relevant or important is Singapore? Ability to maintain status as a major trade, transportation, and logistics hub, as well as its applicability to the US, Europe, China, and Southeast Asia.
Control and reduce corporate expenses, inflation and lifestyle expenses. For foreign nations to maintain a presence here, Singapore is simply becoming too expensive. Locating your regional headquarters there and leveraging it as a transshipment hub to make Singapore competitive with other regional nations in Southeast Asia is no longer helpful to the countries.
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