Some analysts see that frontloading could dampen growth in the second half, compounded by potential drag from US reciprocal tariffs.

Singapore’s non-oil domestic exports (NODX) 13% y-o-y climb in the month of June on the back of continued frontloading ahead of US President Donald Trump’s July 8 deadline has inspired largely neutral outlooks from economists.

Economists Chua Hak Bin and Brian Lee Shun Rong at Maybank Securities (Maybank) have upgraded their 2025 NODX forecast to 4%, which they note implies a slower growth of 2.8% in the second half.

At the same time, the pair are reiterating their 2025 gross domestic product (GDP) growth forecast of 3.2%. Chua and Lee had previously upgraded their GDP forecast to 2.4%, following stronger-than-expected GDP growth in the second quarter.

RHB Bank Singapore’s (RHB) Barnabas Gan and Laalitha Raveenthar have also upgraded their NODX forecast for the full year to 2.0% from an initial 0.0%. At the same time, they retain their 2025 GDP forecast at 2.0%

Fellow economist from UOB Global Economics and Market Research (UOB) Jester Koh is keeping his 2025 NODX forecast of 1.0% to 3.0% unchanged, while Oxford Economics’ Sheana Yue has kept her 2025 GDP projection of 2.0% growth unchanged.

Growth in June 

The 13.3% surge included a $1.3 billion contribution from gold, without which NODX growth would have come in at 3.4% y-o-y. Non-oil re-export (NORX) growth meanwhile grew 18.5% y-o-y.

Chua and Lee note that Singapore's exports of semiconductors, specialised machinery and other electronic components have benefited from broadening artificial intelligence (AI) demand and exemptions from reciprocal tariffs.

Around 61% of Singapore’s exports to the US, by their estimates, are currently exempted from reciprocal tariffs, including semiconductors, electronics, pharmaceuticals and energy. 

Electronics NODX accelerated, growing 8% y-o-y on the back of double-digit expansions in integrated circuits (IC), personal computers (PC) and bare printed circuit boards (PCB).

By market, demand climbed the most in Japan at 76.6%, Hong Kong at 45.9%, Indonesia at 29.8% and South Korea at 27.2%. 

Meanwhile, electronics NORX grew by 26.2% y-o-y in June, owing to PCs, ICs and telecommunications equipment. Aggregate NORX rose by 18.5% y-o-y, after a 16.2% increase in the preceding month, led by Taiwan at 96%, the US at 64.3% and Hong Kong at 26.7%.

Growth in non-electronics exports climbed to 14.5% y-o-y, driven by non-monetary gold which leapt 211.9% y-o-y, specialised machinery at 31.4% y-o-y and lastly, other specialty chemicals at 20.1%.

On the other hand, the export of pharmaceuticals and petrochemicals contracted 13.7% y-o-y and 10.2% y-o-y respectively in June, with the latter declining for the fourth consecutive month. 

NODX growth across markets 

NODX declines in Europe (EU), Thailand, Malaysia, US, Indonesia and Japan were offset by growth across Hong Kong at 54.4%, Taiwan at 28.3%, South Korea at 33% and China at 8.5%.

“Some exports may have been diverted from the EU during the 90-day reprieve, as manufacturing supply cannot be ramped up quickly to meet import demand,” write Chua and Lee.

Exports to Europe, note Chua and Lee, will “likely recover and catch up” following the oncoming US reciprocal tariffs effective August.

They add: “This will help offset and cushion any export slowdown to the US in the second half.”

In June, NODX to Hong Kong at 54.4% and Taiwan at 28.3% were led by specialised machinery and semiconductor chips, while exports to South Korea were driven by specialised machinery at 77.9%, measuring instruments at 202.7% and PCs at 195.3%. 

Chua and Lee note that non-monetary gold was a prominent driver of exports to China and Hong Kong, with gold exports to China surged 2222% y-o-y in June. Excluding gold, NODX to China fell 3.3% y-o-y, for the ninth consecutive month, while gold exports to Hong Kong jumped 71.1% y-o-y.

A post-tariff economy

Overall, Maybank’s Chua and Lee expect the Ministry of Trade and Industry (MTI) to upgrade its GDP forecast range for 2025 to 2% to 3%, once final numbers on the 2Q2025 GDP are released in August.

They also expect Enterprise Singapore to upgrade its full year export forecast from the current conservative 1% to 3% range, as first half NODX growth came in higher than expected at 5.2%. 

Exports and manufacturing growth will likely slow after higher reciprocal tariffs for the region kick in on Aug 1, note Chua and Lee.

According to them, positives that will mitigate the payback and severity of the second half export slowdown are relatively lower US tariffs, broadening global AI demand and US-China de-escalation with a probable extension of the US-China tariff truce beyond Aug 12.

“Singapore faces the lowest US reciprocal tariff in Asia, at about 5.1% in effective terms by our estimates, below the 10% baseline tariff rate due to the current exemptions,” write Chua and Lee.

In the US, wholesale inventories have been rising modestly over the last few months as companies stock up, but US retail inventories have not shown any visible increase.

On this, Chua and Lee write: “We think that the US inventory overhang post-reciprocal tariffs may only last several months before companies have to replenish their stock and order more imports.”

While they see export growth to “likely moderate” in the second half, given the stronger-than-expected growth in the first half, Chua and Lee expect the Monetary Authority of Singapore (MAS) to maintain its current modest appreciation bias for the upcoming meetings. 

“We lower our three-month Singapore Overnight Rate Average (SORA) forecast to 1.5% by end-2025 and 1.2% by end-2026, as safe haven flows continue to dampen domestic interest rates,” write Chua and Lee.

Should the US Federal Reserve (US Fed) cut rates in the second half, this could also drive short-term interest rates lower, the pair add.

Slower second half to come

Looking ahead, UOB’s Koh sees that “payback” from earlier frontloading is likely to dampen growth in the second half, compounded by potential drag from US reciprocal tariffs.

“However, in our view, the eventual growth ‘payback’ may be more pronounced in trade-related services rather than in manufacturing, as frontloading seems to be more pronounced in electronics exports and less so in non-electronics exports and manufacturing,” writes Koh.

Any further growth drag in these sectors, he adds, is likely to stem from weaker demand due to the tariffs themselves. 

RHB’s Gan and Raveenthar note that although June’s NODX numbers offer a “welcome reprieve” and underscore the resilience of Singapore’s trade architecture—especially its regional diversification—it “should not be viewed” as a structural re-rating of the external sector. 

The pair adds: “The fundamental backdrop remains mixed, with a delicate balance between cyclical recovery and looming protectionist headwinds.”

Meanwhile, on Singapore’s GDP in the second quarter, Oxford Economics’ Yue sees that readings from the quarter will be “revised upwards” from advanced estimates released earlier this week.

On NODX, Yue has a slightly more prolonged outlook with regards to the frontloading boost than her fellow economists, noting that the process is "straightforward".

“The extension of the tariff suspension deadline to Aug 1 could further support goods exports. That said, we anticipate any remaining resilience to diminish over the upcoming months, especially if higher tariffs are imposed in the 3Q2025,” writes Yue.

She adds that Singapore could benefit from an established re-exporting sector and a lower reciprocal tariff, while a structural shift in AI-linked electronics demand should continue to be a tailwind. 

Yue surmises: “Therefore, although export growth is expected to decelerate, a collapse in 2025 is unlikely.”

Senior economist at DBS Bank, Chua Han Teng, agrees that NODX of 16.5% y-o-y in the 1H2025 is unsustainable, with the front-loading of shipments eventually being followed by a “payback” through decelerating trade and manufacturing production to materialise in the second half.

“The city-state’s external demand will likely face downward pressures, due to still-high global trade frictions and continued uncertainty surrounding US tariffs, such as the potential imposition of US sectoral tariffs on semiconductors and pharmaceutical goods,” writes Chua.