Bangkok Desk, Mar 26 (efe-epa).- Singapore’s gross domestic product (GDP) contracted 2.2 percent in the first quarter from a year earlier, its biggest contraction in a decade, while the 2020 forecast range was downgraded to -4 percent to -1 percent, the city-state’s authorities said Thursday.
Singapore’s Ministry of Trade and Industry said in a statement that the restrictions put in place on account of the novel coronovirus pandemic were the main reason for the fall in the GDP.
The biggest declines were recorded in the construction sector, which shrank by 4.3 percent year-on-year as compared to the 4.3 percent expansion in the previous quarter, and the services sector, which contracted by 3.1 percent in the first quarter as compared to the same period of 2019.
“Supply chain disruptions and delays in the return of foreign workers as a result of the lockdowns and travel restrictions implemented by other countries in response to the COVID-19 outbreak have also adversely affected some construction projects,” the ministry said.
“By sectors, the air transport, accommodation, food services and retail trade sectors shrank on the back of a sharp decline in tourist arrivals as well as a fall in domestic consumption as a result of the COVID-19 outbreak,” it added.
In February, the ministry had lowered the GDP growth forecast to between 0.5 percent to 1 percent, but with the spread of COVID-19 around the world, there has been a “significant deterioration in the economic situation both externally and domestically,” according to the statement.
“Taking into account the weaker-than-expected performance of the Singapore economy in the first quarter, and the sharp deterioration in the external and domestic economic environment since February, the GDP growth forecast for 2020 is further downgraded to “-4.0 to -1.0 per cent,” the ministry said.
“The wider forecast range (of between -4 percent to -1 percent) is to account for heightened uncertainties in the global economy, given the unprecedented nature of the COVID-19 outbreak, including the public health measures taken in many countries to contain the outbreak,” it added.
Singapore, with 685 coronavirus cases and two deaths, is one of the countries that has best responded to the pandemic, mainly due to efficient systems of detecting the virus and limiting its spread.
However, its economy, one of the most open in the world, is vulnerable to the decline in global trade. EFE-EPA