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Singapore economy seen to contract 4-7% as pandemic impact worsens
The Ministry of Trade and Industry previously forecast the highly trade-dependent city state's gross domestic product would shrink by 1 to 4 percent in 2020.
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An empty street is pictured during restrictions put in place to halt the spread of the COVID-19 coronavirus in the central business district in Singapore on May 22, 2020. (AFP/ROSLAN RAHMAN )
S
ingapore further downgraded its 2020 growth forecast on Tuesday, projecting a 4 to 7 percent contraction as the impact of the coronavirus pandemic has worsened.
The Ministry of Trade and Industry previously forecast the highly trade-dependent city state's gross domestic product would shrink by 1 to 4 percent in 2020.
The revision coincided with the release of data showing the economy had contracted in the first three months of this year by 0.7 percent year on year, and by an annualized 4.7 percent from the previous quarter.
This marked the third time the ministry has cut its economic projection for Singapore for 2020 since the virus outbreak earlier this year. The previous revision came in March.
The Singapore economy last went into negative growth in 2001, when annual GDP fell by 1.1 percent.
The ministry said in a statement that the latest downgrade was due to "the deterioration in the external demand outlook for Singapore as well as the expected economic impact" from a semi-lockdown implemented by Singapore to curb the spread of COVID-19, the respiratory illness caused by the virus.
The semi-lockdown, which led to the shutdown of most workplace premises in Singapore, has "dampened domestic economic activity, along with domestic consumption," it said.
The circuit breaker measures will start being lifted in phases on June 2.
The ministry cautioned that "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."
Irvin Seah, senior economist at Singapore's largest bank DBS, said the downward revision was not surprising as the previous growth projection was no longer tenable after Singapore extended its semi-lockdown beyond May 4.
He added that the full impact of the pandemic will be felt only in the April-June period, saying that the "significantly weaker global demand, labor shortage in the construction sector, supply chain disruptions and restrictive measures imposed during the circuit breaker will inflict a severe blow to the economy."
