On Monday, Singapore made a downgrade in its economic growth forecast for 2020 as the country combats with one of the highest numbers of coronavirus cases outside China.
Consequences of the Outbreak
The Ministry of Trade and Industry stated that the Singapore economy is expected to flourish by around 0.5% this year, and lowered its forecast range for the change in the annual gross domestic product (GDP) to between -0.5% and 1.5%. This is worse when compared to the earlier projections of growth between 0.5% and 2.5%.
“The (earlier) forecast was premised on a modest pickup in global growth, along with a recovery in the global electronics cycle, in 2020. Since then, the outbreak of the coronavirus disease 2019 (COVID-19) has affected China, Singapore and many countries around the world,” the ministry explained in a statement.
The ministry highlighted how the virus outbreak could make a blow on the Singapore economy:
- Sectors that are oriented outwards, such as wholesale trade manufacturing and are going to experience a blow by weaker growth in crucial demand markets of Singapore including China.
- The transport and tourism sectors have been “badly affected” by “a sharp fall” in the number of tourists arriving, especially those from China.
- Domestic consumption has also decreased as people are avoiding activities such as shopping and dining out.
Ministry said that “As the COVID-19 situation is still evolving, MTI will continue to monitor developments and their impact on the Singapore economy closely.”
Singapore, a small country in Southeast Asian has registered 75 confirmed coronavirus cases as of Sunday noon, according to the Ministry of Health. Among those 19 have been discharged, the ministry claimed.
In 2003, the country was also in the list of the worst hit by the global SARS epidemic. On Friday, Prime Minister Lee Hsien Loong highlighted the economic hit from the coronavirus disease, formally been referred COVID-19 has already surpassed that of SARS, according to the local newspaper The Straits Times.
Lee also pointed out that its Singapore could likely experience a recession as a result of the current virus outbreak. The Singapore government has declared many measures to help hit sectors tide through and is expected to declare one of its largest budgets yet to lighten the economic blow from the outbreak.
Fourth-quarter performance of Singapore.
Singapore’s economy increased by 1% year-over-year in the final quarter of 2019, which is better than the previous estimate of 0.8%, according to the Ministry of Trade and Industry. For the whole period of 2019, the Southeast Asian economy increased by 0.7%, the ministry said. That’s the weakest growth Singapore has observed since 2009.
The major blow on Singapore in the fourth quarter was manufacturing, which dipped by 2.3% from a year ago, according to the ministry.
It added that the sector “was weighed down by output declines in the electronics, chemicals, transport engineering and general manufacturing clusters,” which disturbs expansions in the sectors associated with it such as biomedical manufacturing and precision engineering.
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