Cities with economies specialized in particular industries, such as Singapore, Hong Kong, and to some extent, Mauritius until the latter decades, are more susceptible to changes occurring throughout the world. Singapore is dependent on both the oil and gas industry and its role as a financial hub. Any financial crisis will cause a painful economic slowdown and the loss of many jobs. This cycle occurs rather frequently. Due to climate change and shifting political sands, Singapore’s oil and gas industry may eventually come to an end.
In December 2022, Singapore’s non-oil domestic exports (NODX) fell 20.6% yearly, with declines in electronic and non-electronic goods 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, the full-year NODX growth in 2022 was 3.5%, the smallest annual increase since 2019. Exports increased by 4.4% in 2020 and 12.5% in 2021.
In December, non-domestic oil shipments to Singapore’s top 10 markets decreased overall, with exports to China and Indonesia both experiencing declines of over 30%. But exports to Japan and South Korea both saw growth of 6.8% and 14.3%, respectively.
According to Ling, the COVID situation in China, particularly the caution around the re-opening announcement in early December, weighed on economic operations, evident in the dampened NODX of specialized machinery, medicines, and primary chemicals to China.
Given concerns about a worldwide recession, she noted, NODX in the first quarter of 2023 are anticipated to be dismal, with up to a 17% decrease year over year.
The economy of Singapore will continue to be heavily influenced by both internal and international influences.
The importance, involvement, and participation of international initiatives like One Belt, One Road, TPP correction, and global trade agreement. All of these will significantly affect Singapore.
As a hub between the East and West, Singapore is of what relevance or importance? Ability to maintain status as a significant trading, transportation, and logistical hub, as well as its applicability to the US, Europe, China, and South East Asia.
Control over and reduce corporate expenses, inflation, and lifestyle expenses. For foreign nations to keep a presence here, Singapore is becoming simply too expensive. Locating their regional headquarters there and leveraging it as a transshipment hub to make Singapore competitive with other regional South East Asian nations is no longer of use to the countries.
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