FILE PHOTO: A view of a construction site that has stopped work since the start of the “circuit breaker” measures to curb the coronavirus disease (COVID-19) outbreak in Singapore April 20, 2020. REUTERS/Edgar Su
May 26, 2020
SINGAPORE (Reuters) – Singapore downgraded its 2020 gross domestic product forecast for the third time on Tuesday, the trade ministry said, as the bellwether economy braces for the deepest recession in its history.
The city-state lowered its GDP forecast to a contraction range of -7% to -4% from the prior range of -1% to -4%.
Singapore’s economy fell 0.7% year-on-year in the first quarter, the ministry of trade and industry said, and 4.7% on a quarter-on-quarter basis, a less severe decline than advance estimates.
“Notwithstanding the downgrade, 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,” the trade ministry said in a statement.
Singapore also downgraded its 2020 forecast for non-oil domestic exports to -4.0% to -1.0%, from -0.5% to 1.5% previously.
Exports had been a rare bright spot for the economy mainly due to a surge in demand for pharmaceuticals.
Analysts expect the trade-reliant economy to see a deeper contraction in the second quarter due to a two-month lockdown, in which most workplaces closed to curb the spread of the novel coronavirus.
Singapore is facing the deepest recession in its 55-year history, and authorities have warned that unemployment is likely to rise and wages drop.
The city-state has among the highest number of infections in Asia and has said that easing of the lockdown from next month will only be done gradually.
The government first flagged the possibility of recession in February when it cut its 2020 GDP forecast to -0.5% to 1.5%, from 0.5% to 2.5% previously.
Singapore’s finance minister is set to deliver the latest in a string of economic packages to offset the hit to businesses and households from the COVID-19 pandemic later on Tuesday.
(Reporting by John Geddie, Aradhana Aravindan and Fathin Ungku; Editing by Sam Holmes)