Singapore has revised its GDP growth forecast for 2020 downwards to “–4 to –7 per cent”, Ministry of Trade and Industry (MTI) said in a press statement.
The Singapore economy contracted by 0.7 per cent on a year-on-year basis in the first quarter, a reversal from the 1.0 per cent growth in the previous quarter.
On a quarter-on-quarter seasonally-adjusted annualised basis, the economy shrank by 4.7 per cent. This is a pullback from the 0.6 per cent expansion in the fourth quarter of last year.
The outlook for the Singapore economy has weakened further since March, MTI said in its statement.
Outward-oriented sectors such as manufacturing, wholesale trade and transportation & storage will be adversely affected by the sharper-than-expected slowdown in many of Singapore’s key markets, as well as more prolonged supply chain disruptions.
Circuit breaker measures implemented to curb the spread of COVID-19 in Singapore have further dampened domestic economic activity, along with domestic consumption. Sectors such as construction and marine & offshore engineering have been severely affected by manpower shortages due to the outbreak of infections among foreign workers, especially those living in foreign worker dormitories.
Nonetheless, there are pockets of resilience in the Singapore economy, MTI added. Within the manufacturing sector, the biomedical manufacturing cluster is expected to continue to expand, supported by the production of pharmaceutical and biological products.
The information & communications sector is also projected to grow given firms’ resilient demand for IT and digital solutions.
Notwithstanding the downgrade of GDP forecast for 2020, 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.