Singapore’s virus-hammered economy shrank almost 43 percent in the second quarter, in a sign that the country’s first recession in more than a decade is deeper than initially estimated, official data showed yesterday.
Tough curbs within the city-state to contain the COVID-19 pandemic took a heavy toll on the economy, which is largely dependent on global trade and tourism.
GDP in the second quarter fell 42.9 percent on a quarterly basis, worse than the government’s estimate of a 41.2 percent contraction released last month based on two months of data, the Singaporean Ministry of Trade and Industry said.
Photo: EPA-EFE
On an annual basis, the economy shrank 13.2 percent, more than the initial estimate of 12.6 percent.
It marked the second consecutive quarter of contraction, meaning that the city-state has entered a recession for the first time since 2009 during the global financial crisis.
Trade-dependent Singapore is one of the first countries to report growth data for a period when many nations entered lockdowns and offers an ominous warning of the devastation being wrought on the global economy.
The worse-than-estimated figures are likely to ring alarm bells for other Asian economies reliant on trade — typically, Singapore is affected first before economic woes ripple across the region.
For the full year, the government said that it expects the economy to contract between 5.0 and 7.0 percent, compared with an earlier forecast of between 4.0 and 7.0 percent, but added that the road to recovery remains rough.
“Many of Singapore’s key final demand markets saw worse-than- projected economic disruptions in the second quarter,” the ministry said.
These markets “are also expected to experience a more gradual pace of recovery in the second half of 2020 due to the threat of localized outbreaks and the continued need for restriction measures to contain such outbreaks as they occur,” it added.
Singaporean Prime Minister Lee Hsien Loong (李顯龍) in a National Day message on Sunday said that “the crisis is far from over,” as many countries have seen a resurgence of cases after initially managing to control the situation.
Singapore initially kept the virus in check through a strict regime of testing and contact tracing, only for serious outbreaks to later sweep through crowded dormitories housing low-paid migrant workers.
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