Exports growth to taper in Q2 due to China, Russia-Ukraine issues: OCBC

Global supply chain woes may not be resolved soon.

The growth of non-oil domestic experts (NODX) will be slower in the second quarter of 2022 which will likely be caused by China’s strict health crisis strategy and the Russian-Ukraine war, financial services firm, OCBC, said.

This after exports reported a tapered growth in the first quarter of 2022, with 6.4% in April 2022 from 7.7% in March, according to Enterprise Singapore.

With China’s stringent health rules and Russia-Ukraine unrest, global supply chain bottlenecks could not be resolved soon, which also affects the inflationary pressures forcing central banks to implement monetary policy tightening.

Following inflation issues, it could continue to weigh on business and consumer sentiments.

However, OCBC remained hopeful that the NODX growth slowdown will be temporary.

“The external demand picture has dimmed compared to the start of 2022, with market players now concerned about the risk of an outright US recession on the horizon and the EU warning that growth could stall at 0.2% this year under a severe scenario if Russian natural gas supplies are seriously disrupted,” read the bank's statement.

It also pointed out that reopening of domestic tourism and easing restrictions in other ASEAN economies becomes a “silver lining” as China's economy still faces COVID-19 hurdles.

Maybank echoed this, adding that the reopening of borders will partially offset the weaker manufacturing and trading services in the next quarters.

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OCBC Bank

non-oil domestic exports (NODX)

Russia-Ukraine crisis

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