Singapore’s Economy Contracts 2.2% Due to the Pandemic

Singapore’s economy shrunk by 2.2% in the first quarter of 2020 compared to the previous year.

Authorities have also downgraded their 2020 GDP forecast as the world battles coronavirus outbreak.

On Thursday, the Ministry of Trade and Industry said they expected the Singaporian economy to shrink between 1.0% and 4.0% in 2020.

It’s worse than its last month’s forecast for a change of between -0.5% and 1.5% in their annual GDP.

According to the ministry, the downgrade in economic forecast accounted for “the weaker than expected performance” in the first quarter. The ministry also accounted for the sharp decline in the external and economic environment since February.

The broader forecast range accounts for the heightened uncertainties in the global economy considering the unprecedented nature of COVID-19 outbreak, and public health measures many countries have taken to contain it.

According to WHO data, COVID-19 has infected over 400,000, and over 18,000 globally.

As confirmed cases continue to rise, authorities around the world have taken measures to close borders, workplaces, and schools to restrict the movement of people.

Such decisions have hit the economy, with many analysts warning that many countries could enter a recession this year.

Singapore was one of the earliest countries outside China to report cases of COVID-19 disease. Singapore has banned the entry of foreigners, shut bars, nightclubs, and limited crowd sizes.

On Wednesday, Singapore recorded its largest daily rise of 73 cases, bringing it to a total of 631 including two deaths.

Singapore’s first-quarter GDP contraction

Singapore again is one of the earliest countries to release GDP data in the first quarter.

Its data provides a glimpse of how the ongoing outbreak could affect the global economy.

The Ministry of Trade and Industry said the Southeast Asian economy contracted by 2.2% year-over-year in the first quarter and 10.6% quarter-over-year.

The year-over-year contraction was the deepest Singapore has recorded since the first quarter of pf 2009 during the global financial crisis.

Economists had expected the Singaporean economy to shrink by 1.5% year-over-year and 6.3% quarter-over-year. Economists also expect to see a similar trend globally, as the virus puts a constraint on economies.

Singapore’s GDP data are preliminary estimates based on data between January and February. The data is an early indication of the economic situation in the first quarter.

We expect the ministry to release more complete data on Singapore’s GDP in the first quarter in May.