SINGAPORE: The Singapore economy contracted further during the April to June period and has slipped into a technical recession, advance estimates showed on Tuesday (Jul 14), on the back of weak external demand and a COVID-19 “circuit breaker” shuttering non-essential businesses for most of the quarter.
Preliminary data from the Ministry of Trade and Industry (MTI) showed the economy contracting 12.6 per cent on a year-on-year basis, deteriorating sharply from the first quarter’s 0.3 per cent decline.
AdvertisementAdvertisementOn a quarter-on-quarter seasonally adjusted annualised basis, Singapore’s gross domestic product (GDP) shrank by 41.2 per cent in the second quarter, following a 3.3 per cent drop in the earlier three months.
This means that Singapore has entered into a technical recession, defined as two straight quarters of quarter-on-quarter contraction.
[h=3]READ: Singapore's GDP expected to shrink between 4% and 7% as 2020 growth forecast cut again on COVID-19 impact[/h]The advance GDP estimates are computed largely from data in the first two months of the quarter – in this case, April and May – which were the two months when non-essential economic activities were temporarily halted as part of the circuit breaker rules aimed at containing the COVID-19 pandemic.
AdvertisementAdvertisementSingapore exited the circuit breaker on Jun 1 and began a phased reopening of its economy. It entered phase two of the reopening on Jun 19, which allowed retail shops to reopen and restaurants to resume dine-ins while observing social distancing.
[h=3]READ: Singapore GDP forecast to contract by 5.8% in 2020: MAS survey[/h]For the full year, the official outlook is for a GDP contraction of between 4 and 7 per cent, as the coronavirus outbreak continues to pose severe strains on the economy.
To nurse the economic pain, the Government has announced four Budgets worth close to S$100 billion, or nearly 20 per cent of Singapore's GDP.
The measures include wage support for affected employers and cash payouts to adult Singaporeans.
[h=3]BOOKMARK THIS: Our comprehensive coverage of the coronavirus outbreak and its developments[/h]Download our app or subscribe to our Telegram channel for the latest updates on the coronavirus outbreak: https://cna.asia/telegram
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