Singapore’s economic contraction: worse than initial estimates

Singapore on Tuesday reported that its economy contracted more than initially expected and narrowed its economic forecast for the full year of 2020. The Singapore economy contracted by 42.9% in the second quarter of 2020 compared to the previous quarter on an annualized, seasonally-adjusted basis, said the Ministry of Trade and Industry. The updated figure was worse than the official advance estimate released last month, and confirmed the Southeast Asian country had entered a technical recession.

The estimate, computed largely from data in April and May, had shown the economy shrinking by 41.2% in the second quarter compared to the prior three months. On a year-on-year basis, the country’s gross domestic product shrank by 13.2% in the quarter ended June 30, according to the ministry. That’s worse than the earlier estimate of a 12.6% year-over-year contraction and 0.3% on-year dip recorded in the first quarter.

Large parts of the Singapore economy were shut in early April as the country entered a partial lockdown — which the government called a “circuit breaker” — to slow the spread of the coronavirus. Some of the restrictions have been eased starting early June, allowing most of the economy to reopen.

The partial lockdown halted almost all construction activity in the second quarter, resulting in the sector plunging 59.3% year-over-year in the second quarter, data by the Ministry of Trade and Industry showed. An outbreak among migrant workers living in dormitories — many of whom worked in construction — added to the sector’s weakness, said the ministry.

Manufacturing shrank by 0.7% year-over-year;
Accommodation and food services plunged 41.4% on-year;
Transportation and storage dived 39.2% from the previous year;
Wholesale and retail trade fell 8.2% year-on-year;
Finance and insurance grew 3.4% over the same period — the only sector that registered growth.

Revised 2020 forecast
The trade and industry ministry revised its full-year forecast for Singapore to register an economic contraction of between 5% and 7% in 2020. Previously, it had expected the country’s GDP to fall by between 4% and 7%.

Singapore’s economic contraction in the second quarter was worse than initial estimates, CNBC, Aug 11