Singapore’s Trade and Industry minister Chan Chun Sing said today that, the country is “very likely” to see a sharper contraction in the economy due to coronavirus pandemic. He said, “we are really concerned that worldwide, this is going to lead to a more serious problem than many had anticipated just a month ago”.
GDP already experienced -10.6% annualized contraction in Q1, the worst in a decade. Back in March, the government forecast a contraction of 1-4% this year. However, coronavirus spread worsened this month, as infections surged from around just 1000 to over 10000. The government decided to extend the so-called “circuit-breaker” coronavirus containment measures by four weeks until June 1. Chan said he hoped to “progressively open” in a months time.
Separately, Citigroup said earlier this week that the Singaporean economy would contract by -8.5% this year after the “circuit breaker” extension. “The circuit breaker would cause close to 25%-30% of GDP to come to a standstill, with every month of extension further reducing 2020 GDP by 2% to 2.5%,” Citi’s economists wrote in a report. “The technical rebound after the lifting of the circuit breaker on 1st Jun will be capped by continued social distancing and only gradual recovery in exports.”
