( Singapore, 14th July 2020 ) Singapore’s economy slipped into recession in the second quarter, dropping 41.2% quarter-to-quarter, setting a record for the largest contraction. This year may also set the largest economic downturn in history, as the anti-epidemic lockdown measures against the new crown pneumonia severely hit dependence. Singapore economy of trade.
The market had expected Singapore’s gross domestic product (GDP) for the second quarter to fall by 37.4% quarter-on-quarter, but the actual decline exceeded expectations. The epidemic hit the country's construction industry hard, causing industry activity to plummet by 95.6%.
Preliminary data released by the Ministry of Trade and Industry on Tuesday also showed that the GDP for the second quarter fell 12.6% year-on-year. Analysts had previously forecast a contraction of 10.5%.
The decline in GDP marks the second consecutive quarter of contraction in Singapore’s economy, which has met the definition of a technical recession. The country's economy fell slightly by 0.3% year-on-year after the first quarter revision, and contracted by 3.3% quarter-to-quarter. Singapore predicts that the annual GDP will shrink by 4% to 7%, the largest drop in history.
The Ministry of Trade and Industry added that the record contraction of GDP in the second quarter was mainly attributable to the partial blockade measures called “circuit breaker”.
Vishnu Varathan, head of economic strategy at Mizuho Bank in Singapore, said that unless Singapore is forced to re-implement stricter lockdown measures, the economy may have bottomed out in the second quarter.
Lin Xiuxin, head of OCBC’s bond research and strategy department, also commented: “As Singapore’s economy restarts, we should see a slight increase in economic activity in the third quarter. We believe that the third quarter GDP will improve, but it will remain Shrinking area."
The Singapore government has introduced stimulus measures worth nearly 100 billion Singapore dollars (about 306.5 billion ringgits) to curb the impact of the epidemic. The ruling People’s Action Party said that protecting Singapore’s employment is its top priority. The party maintained its ruling position in the election last week.
Analysts had predicted that Southeast Asia’s economy would shrink in the second quarter, mainly affected by the blockade measures from April to June.
**Info & Image are taken online
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