SINGAPORE (1) - Singapore’s economy suffered its largest contraction in a decade in the primary quarter, information confirmed on Thursday, as the coronavirus pandemic prompted the city-state to chop its full-year GDP forecast and plan for a deep recession.
File Photograph: Clouds are seen above the Marina Bay Sands resort in Singapore January 24, 2011. REUTERS/Kevin Lam/File Photograph
The grim information is prone to reinforce fears that international exercise will sharply contract in the primary half of the 12 months. Singapore is without doubt one of the world’s most open economies and one of many first to report progress information for the reason that virus unfold from China in the beginning of the 12 months.
The economy of the Asian monetary and buying and selling hub shrank 2.2% in the primary quarter from a 12 months earlier, preliminary readings from the Ministry of Commerce and Trade confirmed.
That marked the largest drop for the reason that 2009 monetary disaster and was beneath economists’ expectations for a 1.5% decline. On a quarterly foundation, gross home product (GDP) shrank 10.6%, the bottom since 2010 and effectively beneath expectations for a 6.3% decline.
The info prompted the commerce ministry to chop its 2020 GDP forecast vary to -4% to -1%, from a earlier vary of -0.5% to 1.5%, and firmed up traders’ bets for main fiscal and financial stimulus.
“The COVID-19 outbreak has escalated, and led to a big deterioration in the financial scenario each externally and domestically,” the commerce ministry mentioned.
Simply weeks after saying multi-billion greenback schemes to offset the impression of the outbreak on companies and households in its annual funds, the finance ministry is ready to announce extra aid packages afterward Thursday.
The Financial Authority of Singapore (MAS), in the meantime, has introduced ahead its semi-annual financial coverage assertion to Monday, March 30, and plenty of economists expect drastic easing not seen for the reason that monetary disaster.
“The extent of the primary two months already tells you...how unhealthy it will get,” mentioned Selena Ling, head of treasury analysis and technique at OCBC Financial institution.
“The chances are they are going to deliver out a really large bazooka this afternoon, and are available subsequent Monday, MAS may also do what’s vital.”
Singapore has been battling the virus outbreak which has killed greater than 19,000 globally since mid-January. It has seen a surge in mainly-imported infections in latest days, and on Wednesday recorded its largest every day leap in circumstances bringing its complete to 631.
“With quite a few main industrial economies now instituting social distancing measures and/or lockdowns, large-scale near-term declines in financial exercise are on the way in which, and a world recession is now our baseline,” Oxford Economics mentioned in a word to purchasers this week, whereas noting progress might rebound rapidly as soon as robust containment measures are lifted.
Reporting by John Geddie, Aradhana Aravindan and Joe Brock; Enhancing by Kim Coghill