Singapore Sees Sharper Economic Slump as Virus Spreads Globally

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The city-state is “very likely” to see a sharper fall in GDP, the city-state’s trade and industry minister Chan Chun Sing said Thursday in an interview with Bloomberg Television’s Haslinda Amin. “We are really concerned that worldwide, this is going to lead to a more serious problem than many had anticipated just a month ago”.

The minister refrained from giving a new official forecast for GDP, but noted that connectivity among the major economies has been unsettled, hurting the short-term capacities and long term capabilities of countries. The country’s gross domestic product contracted an annualized 10.6% in the first quarter — most in a decade — with the government in March forecasting a contraction of 1%-4% for the year.

Singapore on Tuesday extended its “circuit-breaker” measures for a further four weeks until June 1 in a bid to “decisively” bring down coronavirus cases within the community. Chan said he hopes to ‘progressively open’ the economy in a month’s time and said the country is planning ‘much more testing’ for the entire population.

Initially seen as a global model for how to contain the pandemic, Singapore now has the most cases in Southeast Asia — more than 10,000 — as Covid-19 spreads quickly in densely packed dormitories housing foreign laborers.

READ: How Singapore Flipped From Virus Hero to Cautionary Tale

The government has committed more than S$60 billion ($42 billion) in fiscal support and the Monetary Authority of Singapore has undertaken unprecedented easing steps to cushion the blow for businesses and households.

Citigroup Inc (NYSE:C). economists warned that Singapore will witness a deeper recession because of the extended circuit breaker, with the economy now seen contracting 8.5% for the year.

©2020 Bloomberg L.P.