Politics

Singapore recession forecast for 2020 worsens to between -4% and -7%


Tue, May 26, 2020 – 8:00 AM

THE Singapore economy is staring at a much deeper recession than earlier forecast, with gross domestic product (GDP) projected to shrink by between 7 per cent and 4 per cent this year.

The official outlook was lowered on Tuesday, from previous estimates of a contraction of between 1 per cent and 4 per cent, as the fallout from the Covid-19 pandemic continued.

“Notwithstanding the downgrade, there continues to be a significant degree of uncertainty over the length and severity of the Covid-19 outbreak, as well as the trajectory of the economic recovery, in both the global and Singapore economies,” the Ministry of Trade and Industry (MTI) added.

Meanwhile, Singapore’s first-quarter GDP decline was revised to a narrower 0.7 per cent, from an earlier flash estimate of 2.2 per cent contraction, with the help of a better-than-expected showing in manufacturing than advance data had indicated.

Still, the final print offered cold comfort. Further deterioration is expected on factors such as a “circuit breaker” in April and May shutdown to curb the spread of the deadly coronavirus.

Measures taken under the circuit breaker “have further dampened domestic economic activity, along with domestic consumption”, the MTI said.

It highlighted both the impact on consumer-facing segments such as retail and food services, as well as a broad-based suffering from reduced labour capacity and lower demand.

Otherwise, external-facing industries such as manufacturing, wholesale trade and transport and storage are expected to take a hit from supply chain disruptions and slowdowns in key markets, while sectors like construction and marine and offshore engineering “have been severely affected by manpower shortages” from coronavirus outbreaks in foreign worker communities.

But the MTI highlighted the information and communications industry, and biomedical production of pharmaceuticals and biological products, as “pockets of resilience in the Singapore economy”.





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