Singapore Economy Falls 13.2% in Q2 in Worst Quarter on Record

Singapore
  • Singapore suffered a deeper recession in the second quarter than previously reported due to the coronavirus-induced economic downturn at home and abroad.
  • The economy fell by 13.2 percent year-on-year in the second quarter, worse than the previously reported 12.6 percent fall and the worst on record.
  • The outlook for external demand in Singapore has weakened slightly since the last GDP forecast update in May, it stated.
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Singapore • The Ministry of Trade and Industry (MTI) said on Tuesday that Singapore suffered a deeper recession in the second quarter than previously reported due to the coronavirus-induced economic downturn at home and abroad.

Furthermore, the full-year economic outlook was marginally lowered with MTI now forecasting that gross domestic product (GDP) would fall between 5% to 7% in 2020 compared with the previous forecast range of -4% to -7%.

The economy fell by 13.2 percent year-on-year in the second quarter, worse than the previously reported 12.6 percent fall and the worst on record.

The economy declined by 6.7 percent for the first half of 2020, relative to the initial 6.45 percent shrinkage in May.

The GDP plunge in the second quarter was due to the circuit breaker measures implemented from April 7 to June 1, 2020, to slow the spread of COVID-19 in Singapore, as well as weak external demand amid a global economic downturn caused by the pandemic, said the MTI in a statement.

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The economy shrank by 13.1 percent on a seasonally adjusted quarter-on-quarter basis, worse than the decline of 0.8 percent in the first quarter.

The MTI said; “Notwithstanding the narrowing of the forecast range, there continues to be significant uncertainty over how the Covid-19 situation will evolve in the coming quarters, and correspondingly, the trajectory of the economic recovery in both the global and domestic economies.”

The outlook for external demand in Singapore has weakened slightly since the last GDP forecast update in May, it stated.

Many of the key final demand markets in Singapore experienced weaker than anticipated economic declines in the second quarter, and are also expected to face a more gradual recovery rate in the second half of 2020 due to the threat of localized outbreaks and the continued need for restriction measures to control these outbreaks when they arise, the MTI stated.

Throwing light on the anticipated recovery, the MTI said the subdued external economic climate would continue to drag on several outward-oriented sectors including transportation & storage and wholesale trade in Singapore.

The reopening of international borders is likely to take effect more gradually than previously anticipated due to the ongoing COVID-19 situation worldwide.

This is expected to impact the prospects of tourism-reliant industries including hotels, tour operators, and organizers of meetings and events (MICE) and air travel.

The downturn in the construction and marine & offshore engineering sectors is projected to be deeper and more protracted than previously anticipated due to the longer time taken to clear foreign workers who reside in dormitories has.

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