- Singapore's non-oil exports to its top markets led the wider decline, with exports to China falling by more than 41%, to the U.S. by 31.5% and to Hong Kong by more than 55%.
- "The worst is likely not over for Singapore's export sector. We continue to expect further falls in global demand," said Oxford Economics senior economist Alex Holmes.
Singapore's non-oil domestic exports plunged 25% year on year in January — their largest drop in 10 years.
Government data showed Singapore's non-oil exports to its top markets led the wider decline, with exports to China falling by more than 41%, to the U.S. by 31.5% and to Hong Kong by more than 55% for the month.
The reading marks the fourth consecutive contraction and the steepest fall since February 2013, when the economy saw more than a 30% decline.
Non-oil retained exports also fell 10.4% in January, following the 7.2% decline in December. Total trade also fell by 10.4% year on year, with total exports dropping 9.6% and imports contracting by 11.3%.
The disappointing trade data comes days after Singapore released its latest budget for the year. Finance Minister and Deputy Prime Minister Lawrence Wong told CNBC in an exclusive interview that the government struggled to strike a "delicate balancing act" between tackling inflation and ensuring fiscal prudence.
Oxford Economics senior economist Alex Holmes called the January trade data "alarming."
"Singapore's external sector had another very tough month in January, and we doubt this marks the bottom," he said in a Friday note.
"The worst is likely not over for Singapore's export sector. We continue to expect further falls in global demand," he said, reiterating the firm's expectation that there will be a global recession in the first half of the year and adding that it will continue to weigh on Singapore's trade outlook.
Oxford Economics expects Singapore's economy to grow marginally by 0.7% in the full year.
"The weakness of trade is a key reason we expect GDP growth to come in near the bottom of the government's 0.5%-2.5% forecast in 2023," he said.
He noted that the value of domestically produced chip exports fell below lows seen during the earlier phases of the pandemic, and that a "turn in the semiconductor cycle" is continuing to hurt exports.
"Tumbling export earnings are also likely to weigh on domestic demand, stalling business investment and employment growth," he said.
— CNBC's Lim Hui Jie contributed to this report.