Non-Oil Domestic Trade

seasonally adjusted, the fourth straight month of contraction. Yoy, NODX was below consensus and our expectations, falling 4.5% (Nov 07: -3.4% yoy). Full-year NODX grew 2.3% yoy in 2007, the slowest since 2002. For 2008, the government has projected growth of 4-6% (we are looking for 4.5%), on the assumption of a recovery in tech exports in 2H08. We expect stronger contributions from non-tech exports in 2008: drugs on the back of capacity expansion and more rig deliveries. 2007 NODX growth to the US slowed to +2.7% yoy from +14.4% in 2006 and the US accounted for 0.4% pt of overall NODX. 2008 NODX to the US is expected to decelerate further. We are looking for stronger contributions from China/Hong Kong, Indonesia, the EU and India to bring NODX growth to 4.5%, hopefully with the help of stronger pharma and lumpy items such as rigs/vessels.