Singapore's economy contracted almost 43 percent in the second quarter of 2020 compared to the previous quarter on an annualized, seasonally-adjusted basis, said the Ministry of Trade and Industry (MTI). On a year-on-year basis, the economy shrank 13.2% in the quarter ended June 30, worse than the 12.6% estimated earlier.
The latest figure is worse than the advance estimate made last month and shows that the Southeast Asian country has entered a technical recession.
The country's second-quarter performance is by far the worst on record and once again reflects how the coronavirus pandemic has battered the country's economy that was thriving till some time back. The government now expects a further contraction in the GDP in the next quarter compared to its earlier predictions.
Singapore Economy in Shambles
Singapore's economy shrank a whopping 42.9 percent in the second quarter of 2020, worse than the government's advance estimate of a 41.2 percent decline released last month. Moreover, the country's gross domestic product (GDP) shrank 13.2 percent on a year-on-year basis in the quarter ended June 30, worse than the 12.6 percent estimated earlier, according to the MTI.
Also, the ministry lowered the full-year economic outlook. The GDP is now expected to shrink 5 percent to 7 percent compared to the previous forecast range of 4 percent to 7 percent. The updated second-quarter decline now brings the GDP contraction in the first half of 2020 to 6.7 percent on a year-over-year basis, worse than the earlier estimate of a 6.45 percent decline.
The MTI believes that the economy is slowly recovering but said that the crisis is far from over. The ministry warned that "the outlook for the Singapore economy has weakened slightly since May", on uncertainties such as a global economic downturn and pandemic-related developments.
Crisis Deepens for Singapore
The second-quarter performance is by far Singapore's worst on record. "This is our worst quarterly performance on record. The forecast for 2020 essentially means the growth generated over the past two to three years will be negated," said Chan Chun Sing, the minister of trade and industry.
Singapore almost went under a lockdown in early April, which the country called a "circuit breaker", in a bid to contain the spread of the deadly coronavirus. Some of the restrictions started getting lifted only in June. The two months of partial lockdown literally battered the country's economy, the effect of which is being felt now.
The fall in GDP was due to the Circuit Breaker (CB) measures implemented from 7 April to 1 June 2020 to slow the spread of Covid-19 in Singapore, as well as weak external demand amidst a global economic downturn caused by the Covid-19 pandemic, the ministry said in a statement.
Singapore's economy largely depends on exports and tourism, both of which have been taking a hit due to the pandemic. Also, Prime Minister Lee Hsien Loong on Sunday said that hat "the crisis is far from over" as many countries have seen a resurgence of cases after initially managing to control the situation.