Singapore seen as ‘safe haven’ despite global trade risks

NODX forecast raised as strong exports offset tariff headwinds.

Singapore’s trade outlook remains vulnerable despite an improved forecast for exports, according to RHB.

Singapore’s economy is facing persistent global uncertainty, even as near-term trade data offers some upside surprises, RHB said in a new report.

The analysis comes after US President Donald Trump signed an executive order imposing new “reciprocal” tariffs on 68 countries and the EU, effective 7 August. The baseline tariff is 10%, with some rates reaching as high as 50% for India, 39% for Switzerland, and 35% for Canada. Several countries, including Cambodia, Thailand, and Taiwan, have negotiated lower rates, while Japan, the EU, and some ASEAN economies have secured broader concessions.

Both US and Chinese officials have signalled that the current 90-day tariff pause could be extended, pending Trump’s approval.

As a trade-dependent economy, where total trade equals nearly three times GDP, Singapore remains highly exposed to shifts in global trade flows. RHB warned that export demand is likely to stay subdued through the second half of 2025, with manufacturing continuing to face headwinds. Electronics, machinery, and precision engineering are among the sectors most at risk from indirect spillover effects, even though Singapore is exempt from some direct US tariffs.

“In contrast to the broader headwinds, we have revised our 2025 forecast for non-oil domestic exports (NODX) upwards to 2.0%, from an initial projection of 0.0%. This revision is supported by a strong YTD performance, with NODX growing at an average of 5.2% YoY in H1 2025, the fastest pace since July 2024,” RHB said, noting broad-based gains in both electronic and non-electronic exports.

RHB is keeping its industrial production forecast unchanged at 2.0% for 2025 but remains most bearish on chemicals, machinery, and transport equipment. Its GDP growth forecast for the year also stays at 2%, with risks tilted to the downside.

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