Singapore’s economy entered into recession last quarter as a result of the coronavirus lockdowns which shattered businesses across the world.
According to Singapore’s Ministry of Trade and Industry, Gross Domestic Product (GDP) plunged by a record 41.2% in the three months that ended in June, on a quarter-on-quarter annualized basis.
The most affected sectors were as follows:
- Manufacturing plunged 23.1% on a quarter-on-quarter, annualized basis, compared with growth of 45.5% in the first quarter. On a year-on-year basis, the sector grew 2.5%, mainly due to a surge in output in the biomedical sector, though that was still lower than the 8.2% rise in the first quarter.
- Construction plunged 95.6% on a quarter-on-quarter basis and declining 54.7% year-on-year
- The services sector plunged 37.7% on a quarter-on-quarter, annualized basis, and 13.6% year-on-year. Tourism businesses, like airlines, hotels and restaurants, were affected by travel restrictions.
A plunge in global trade has hit Singapore’s export-reliant manufacturing industry, while retailers saw a record decline in sales after partial lockdown measures were imposed last quarter.
On a year-on-year basis, GDP plunged 12.6% versus economists forecast for a 10.5% contraction.
The central bank eased its monetary policy in March, while the government has pumped in nearly $72 billion worth of stimulus to mitigate the impact of the pandemic.
In June, the International Monetary Fund warned of a steep contraction in global economic activity as the health crisis shut businesses, depressed consumption and paralyzed trade. It forecast 2020 world output to shrink by 4.9%, compared with a 3.0% contraction predicted in April.