(Bloomberg) -- Singapore’s economy probably will contract 4% to 7% this year as the coronavirus outbreak and measures to contain it pummel the trade-reliant city state.
The government revised its forecast from a previous projection for a contraction of 1% to 4% as the outlook for external demand deteriorates, the Ministry of Trade and Industry said in a statement Tuesday. The MTI also published final estimates for the first quarter, which showed gross domestic product declined an annualized 4.7% from the previous three months, far better than the 10.6% drop estimated earlier.
“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,” the MTI said.
As one of the world’s most open economies, Singapore has been severely hit by the slump in global trade and travel amid the coronavirus outbreak. Deputy Prime Minister Heng Swee Keat is set to unveil a fourth stimulus package in Parliament later Tuesday to further counter the economic pain.
Singapore will begin easing “circuit breaker” restrictions on residents’ movement from June, to be replaced by a three-phase system to further reopen the economy. The city state has experienced a surge in virus cases among the migrant-worker community, while the daily case count among locals has hovered in single digits for most of the past month.
The gloomy outlook for Singapore follows downbeat news on growth elsewhere in the region over the past week. China last week abandoned an annual growth target for 2020, pledging more stimulus especially targeted at employment. Japan saw consumer prices decline in April for the first time in more than three years, while India’s central bank expects GDP to contract for the first time in more than four decades.
Other Details
- GDP contracted 0.7% in the first quarter from a year earlier, better than the 1.6% decline in a Bloomberg survey of economists
- Manufacturing surged an annualized 37.3% in the first quarter from the previous three months, services plunged 13.3%, and construction contracted 21.8%
- In a separate report, Enterprise Singapore said non-oil domestic exports will probably contract 1% to 4% in 2020
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