The continued spread of the coronavirus around the globe is expected to have adverse effects on investment in Singapore and many other nations unless a containment plan is discovered soon. Fears of wavering business confidence in the Asian nation were echoed by Vivian Balakrishnan, who is the foreign minister of Singapore. Speaking to a popular publication, he claimed that "the genie was out of the bottle."
Balakrishnan added that containment of the disease would have been possible if it had been like SARS, which spread only in a few Asian nations, including China, South Korea, Singapore, and Japan. Over 8,000 people were infected by SARS, with 774 losing their lives, according to the World Health Organization.
In comparison, the new disease has already infected over 110,000 people in around 110 countries, with over 4,000 deaths reported, according to WHO.
As for the impact coronavirus will have on the economy, Balakrishnan noted that the SARS outbreak lasted for only four months, and its economic impact took only six months to wear off. However, the spread of the new virus that was first reported in China in December 2019 could last longer, and its impact will be bigger due to the scale of the outbreak.
Therefore, people need to be psychologically prepared since it's a global phenomenon, and it's likely to last for some time. The minister is a trained medical doctor by profession and predicted two possibilities on how the new outbreak is expected to go.
1.The virus could spread and turn into a global pandemic which has potentially horrendous impact;
2.It could become endemic, thus turning into one of the common viruses that cause illnesses in people.
Impact On Investment In Singapore And The Economy
According to data from Statista, the effect of the virus on the economy of Singapore so far has been detrimental with a -0.26% change. And private-sector economists see the economy contracting by around 0.8% by the end of the first quarter of 2020.
The full-year growth forecast has also been slashed to about 0.6%. The new predictions come from a survey conducted by the Monetary Authority of Singapore (MAS), which surveyed 21 economists and analysts.
The survey pointed at the growing spread of the coronavirus as the biggest downside risk to the economy according to the forecasts. Now in over 110 countries, the spread of the outbreak has upset markets worldwide, and there is increased talk of a global recession.
Even the Singapore government has had to downgrade its own forecast of GDP growth by a full percentage point last month to -0.5% to 1.5%. The range raised the possibility of a first full year recession for the nation for the first time in about two decades.
All respondents cited the outbreak of the virus as a downside risk, while 94.1% put it as the number one reason growth is likely to be lower than their forecast. According to the survey, the economy is expected to grow between 0% and 0.9% in 2020 compared to the 1% to 1.9% predicted in a December poll.
Economists believe the virus has the potential to hurt all sectors of the economy. The manufacturing sector growth was forecast to shrink by 0.3%, while wholesale and retail are expected to shrink by 0.7%. Also, the accommodation and food services are expected to contract by 1.6%.
However, if the disease can be contained, investment in Singapore will rise again. The economist saw the economy recovering by 2% in 2021, with the majority of the forecasts ranging from 1.5% to 2.4%.
Coronavirus Will Test How Well A Country Is Prepared
Singapore was one of the earliest nations to report cases of the Covid19 virus. Currently, the country has 166 confirmed cases where 93 of those have been discharged from hospitals, according to the nation's Ministry of Health. But, there hasn't been any death reported so far.
According to Balakrishnan, there shouldn't be any assumptions that it will remain this way, and the country needs to be prepared for the worst.
WHO has praised the Singapore government's response to the coronavirus outbreak. According to Tedros Ghebreyesus, a senior official at WHO, the nation is an excellent example of an all of government approach when it has come to how they have dealt with the outbreak.
After taking many years to build its capabilities to handle an outbreak of this magnitude, the new outbreak will now test Singapore's capabilities.
The minister believes the new virus is very dangerous, and it would be wishful to think that it's going to behave like the previous viruses.
Therefore, the nation is best ready, not making assumptions that the virus will disappear in the summer months. In fact, the new disease is an acid test of every country's "quality of healthcare, standard of governance and social capital." According to the minister, if any of the three is weak, that nation is likely to be exposed quite ruthlessly by the new epidemic.