Singapore’s virus-hammered economy shrank almost 43 percent in the second quarter, in a sign that the country’s first recession in more than a decade was deeper than initially estimated, official data showed Tuesday.
The outlook for the Singapore dollar is now very negative.
Tough curbs within the city state to contain the coronavirus pandemic took a heavy toll on the economy, which is largely dependent on global trade and tourism.
Gross domestic product fell 42.9 percent in the three months to June from the previous quarter, worse than the government’s advance estimate of a 41.2-percent contraction released last month based on two months of data, the trade ministry said.
On-year, the economy shrank 13.2 percent in April-June, more than the initial estimate of 12.6 percent.
It marked the second consecutive quarter of contraction, meaning the city state has entered a recession for the first time since 2009, when it was battered by the global financial crisis.
Trade-dependent Singapore is one of the first countries to report growth data for the period when many nations entered lockdowns, and offers an ominous warning of the devastation being wrought on the global economy.
The worse-than-estimated figures will also ring alarm bells for other Asian economies reliant on trade — typically, Singapore is hit first before ripples spread across the region.
For the full year, the government said it expects the economy to contract between 5.0 and 7.0 percent, compared with an earlier forecast of between 4.0 and 7.0 percent, but added the road to recovery remains rough.
“Many of Singapore’s key final demand markets saw worse-than- projected economic disruptions in the second quarter,” the trade ministry said in a statement.
These markets “are also expected to experience a more gradual pace of recovery in the second half of 2020 due to the threat of localised outbreaks and the continued need for restriction measures to contain such outbreaks as they occur,” it added.
Prime Minister Lee Hsien Loong in a National Day message on Sunday warned that “the crisis is far from over” as many countries have seen a resurgence of cases after initially managing to control the situation.
Singapore initially kept the virus in check through a strict regime of testing and contact-tracing, only for serious outbreaks to later sweep through crowded dormitories housing low-paid migrant workers.
It has reported more than 55,000 infections so far and 27 deaths.