VINACHEM

Singapore’s petrochemical exports fell by 10.2% year on year to (S$) 1.09 billion in June, but overall non-oil domestic exports (NODX) rose ahead of US tariffs which are expected to weigh on the trade-reliant economy in the latter half of this year.

NODX to US down 4.8% year on year in June; exports to most key markets decline

Payback from export front-loading to dampen H2 GDP growth

Singapore still awaiting official US tariff notification

Singapore’s NODX rose by 13% year on year to S$15.4 billion last month, reversing the 3.9% contraction in May and marking the strongest expansion since July 2024, Enterprise Singapore data showed on Thursday.

For the first six months of 2025, overall NODX rose by 5.2% year on year.

Shipments of non-electronic NODX, which includes pharmaceuticals and chemicals, rose by 14.5% year on year to S$12 billion in June, reversing the 5.8% decline in the preceding month.

NODX to the US fell by 4.8% year on year in June, extending the 20.6% decline in May, while exports to Japan, Indonesia, Malaysia, Thailand and the EU also decreased.

Singapore is a leading petrochemical manufacturer and exporter in southeast Asia, with more than 100 international chemical companies, including ExxonMobil and Aster Chemicals & Energy, based at its Jurong Island hub.

Singapore’s economy grew by 4.3% in the second quarter from a year earlier, but significant global economic uncertainty persists in the second half, driven by unclear US tariff policies.
For the first half of 2025, the annual average GDP growth was 4.2%, supported by front-loading of exports and to a smaller extent production in anticipation of further US tariffs.

Singapore posted GDP growth of 4.4% in 2024.

“The payback from earlier front-loading is likely to dampen growth in H2 2025, further weighed down by the potential drag from the US reciprocal tariffs,” said Jester Koh, an economist at Singapore’s UOB Global Economics & Markets Research.

US President Donald Trump has informed several nations that tariffs ranging from 20% to 50% will take effect on 1 August, and cautioned that any retaliatory measures would be met with a like-for-like response.

Singapore has not yet received official notification of these new tariffs from the Trump administration.

Its exports continue to be subject to the 10% baseline tariff previously announced in April.

Meanwhile, southeast Asian neighbors Vietnam and Indonesia have successfully negotiated agreements with Washington for tariffs below the levels initially threatened by President Trump.

“For Singapore, the priority appears to be negotiating concessions on future pharmaceutical tariffs which Trump has threatened could reach as high as 200%,” Koh said.

A tariff-induced slowdown in Singapore’s key trading partners could further intensify downside risks to growth, he noted.

“Singapore is likely the most exposed to external growth shocks in major economies (US, EU, China) given its high share of domestic value added in final demand originating from these markets,” Koh said.

Singapore’s Deputy Prime Minister Gan Kim Yong is expected to head to the US later this month for trade talks and intends to continue discussions on the country’s pharmaceutical exports.

The country’s central bank now expects tariffs to hit production and exports “with a lag, especially when the boost from frontloading dissipates”, Monetary Authority of Singapore (MAS) managing director Chia Der Jiun said on 16 July.

“At this juncture, the impact of tariffs and uncertainty have yet to assert in a major way… For now, economic activity and output have been resilient, but front-loading will not continue indefinitely and will have to be paid back,” Chia said.

“Consumption and investment will likely soften in the months ahead. Consistent with this, forward looking survey-based indicators of consumer and business confidence are slipping,” he added.

– Source: ICIS