Singapore's economy contracted by 5.8 percent year over year in 2020, government data showed on Monday. The sobering numbers summed up the troubles of a year in which sectors like construction, aviation and tourism were hit hard by the pandemic.
However, the economy performed better than official estimates. According to the official forecast, the economy would have contracted between 6 percent and 6.5 percent. Again, on the brighter side, most industries recorded some improvement in the fourth quarter of the pandemic-hit year.
In the October-December quarter, gross domestic product (GDP) contracted 3.8 percent, the Ministry of Trade and Industry said in a statement. Economists polled by Reuters had predicted that the GDP would decline 4.5 percent.
Singapore Prime Minister Lee Hsien Loong had warned last week that while the country had opened up following months of curbs, the economic revival would be uneven. He said that while the country was seeing signs of stabilization, economic activity would likely remain below pre-COVID-19 levels for some more time.
"After our most severe downturn since independence, we look forward to a rebound in 2021, although the recovery will be uneven, and activity is likely to remain below pre-COVID-19 levels for some time," the prime minister said in a New Year message. "Economically, we are not yet out of the woods either, but we are beginning to see signs of stabilisation," he added.
'A Lot Depend on Covid Vaccine'
"Recovery going forward in 2021 will probably continue to be quite gradual ... And a lot of it will depend on the speed at which the government can distribute the COVID vaccines and whether or not this can allow us to reopen the borders more quickly," Barclays regional economist Brian Tan told Reuters.
According to official numbers, Singapore reported 35 new COVID-19 cases on Sunday. There are only 64 confirmed cases who are still in treatment at hospitals. The country's total case count stands at 58,662.
Sector-Wise Performance of Economy
The fourth quarter numbers showed signs of revival and growth in key sectors. While goods-producing industries recorded a growth of 3.3 percent manufacturing expanding by 9.5 percent year over year. The manufacturing sector was boosted by increased activity in the electronics, biomedical and precision engineering sectors. This outweighed the drop in performance in sectors like transport engineering and general manufacturing clusters.
Meanwhile, the construction sector still continued to contract but the rate of contraction came down significantly. The services sector also continued to fall for the fourth-straight quarter, recording a 6.8 percent contraction in the fourth quarter and a 7.8 percent plunge for the whole year.