Singapore enters into technical recession
Warning of challenging times ahead, Singapore’s Trade and Industry Minister Chan Chun Sing predicted a “slow and uneven journey” as Singapore embarks on the road to recovery from COVID-19.
Chan’s comments came after Singapore’s Ministry of Trade and Industry (MTI) released data showing that Singapore’s GDP shrank 41.2% in the April to June period, driving the nation into a technical recession, defined by economists as two consecutive quarter-on-quarter contractions.
Attributable to weak external demand and COVID-19 “circuit breaker” (CB) measures implemented in Singapore, this also represented a year-on-year contraction of 12.6%, a deterioration from the first quarter’s revised 0.3% decline.
Chan added, “The numbers clearly reflect the extent of the challenges facing our economy amid the COVID-19 pandemic and the hard work ahead of us to restore the economy.
“The road to recovery in the months ahead will be challenging. We expect recovery to be a slow and uneven journey, as external demand continues to be weak and countries battle the second and third waves of outbreak by reinstating localised lockdowns or stricter safe distancing measures.”
Singapore exited its CB period on June 1, which saw a phased reopening of the economy. Phase 2, which was introduced on June 19, further allowed retail shops to reopen and restaurants to resume dine-ins, although the impact on key industries such as tourism, construction and services continues to see jobs at risk in the country.
The Singapore government expects the country’s GDP to shrink between 4 and 7% in 2020, a downbeat sentiment shared by the Asian Development Bank, which earlier this year predicted Singapore’s economy to contract by 6% this year.