Singapore economy plunges more than 40% in second quarter

The Singapore-Malaysia border will reopen for business travel and labourers on August 10. Picture: Lionel Lim

Singapore’s economy contracted by a record 41.2 per cent in the second quarter over the previous three months, entering a technical recession as measures to contain the coronavirus hammered the city-state’s export-focused economy.

The drop in Singapore’s GDP was the largest on record, according to preliminary figures from the trade and industry ministry, following a 3.3-per cent contraction in the first quarter. Year-on-year, the economy shrank by 12.6 per cent, the largest drop since independence in 1965.

The plunge in demand for goods around the world due to the virus has dealt Singapore a heavy blow. According to World Bank data, the value of its exports and imports amounts to more than four times the size of its GDP, making it the world’s fourth-most trade-dependent economy.

The economic performance in the second quarter worsened mainly due to the implementation of partial lockdown measures aimed at reducing the spread of the coronavirus.

Those measures, which started in early April, involved shutting most workplaces – except those offering essential services – and closing all schools and most other public venues temporarily. The period lasted nearly the entire second quarter, with the Singapore government easing some measures starting in early June.

Full-year contraction forecast at up to seven per cent

For the full year 2020, Singapore’s government forecasts the country’s worst economic recession ever, with a projected annual contraction of between four and seven per cent.

Looking forward, most economists are expecting a rebound supported by the easing of partial lockdown measures last month and also by the government’s record-size stimulus package, which is equivalent to around 20 per cent of GDP.

On July 14, Singapore and Malaysia further announced that they would gradually resume cross-border travel for essential and official business from August 10. Under this scheme, long-term immigration pass holders may enter the other country for work, which will mainly benefit the hundreds of thousands of labourers from Malaysia who commute to Singapore on a regular basis for work.

The Singapore-Malaysia border will reopen for business travel and labourers on August 10. Picture: Lionel Lim Singapore's economy contracted by a record 41.2 per cent in the second quarter over the previous three months, entering a technical recession as measures to contain the coronavirus hammered the city-state’s export-focused economy. The drop in Singapore’s GDP was the largest on record, according to preliminary figures from the trade and industry ministry, following a 3.3-per cent contraction in the first quarter. Year-on-year, the economy shrank by 12.6 per cent, the largest drop since independence in 1965. The plunge in demand for goods around...

The Singapore-Malaysia border will reopen for business travel and labourers on August 10. Picture: Lionel Lim

Singapore’s economy contracted by a record 41.2 per cent in the second quarter over the previous three months, entering a technical recession as measures to contain the coronavirus hammered the city-state’s export-focused economy.

The drop in Singapore’s GDP was the largest on record, according to preliminary figures from the trade and industry ministry, following a 3.3-per cent contraction in the first quarter. Year-on-year, the economy shrank by 12.6 per cent, the largest drop since independence in 1965.

The plunge in demand for goods around the world due to the virus has dealt Singapore a heavy blow. According to World Bank data, the value of its exports and imports amounts to more than four times the size of its GDP, making it the world’s fourth-most trade-dependent economy.

The economic performance in the second quarter worsened mainly due to the implementation of partial lockdown measures aimed at reducing the spread of the coronavirus.

Those measures, which started in early April, involved shutting most workplaces – except those offering essential services – and closing all schools and most other public venues temporarily. The period lasted nearly the entire second quarter, with the Singapore government easing some measures starting in early June.

Full-year contraction forecast at up to seven per cent

For the full year 2020, Singapore’s government forecasts the country’s worst economic recession ever, with a projected annual contraction of between four and seven per cent.

Looking forward, most economists are expecting a rebound supported by the easing of partial lockdown measures last month and also by the government’s record-size stimulus package, which is equivalent to around 20 per cent of GDP.

On July 14, Singapore and Malaysia further announced that they would gradually resume cross-border travel for essential and official business from August 10. Under this scheme, long-term immigration pass holders may enter the other country for work, which will mainly benefit the hundreds of thousands of labourers from Malaysia who commute to Singapore on a regular basis for work.

NO COMMENTS

Leave a Reply