Singapore GDP contracts sharply, economy heads for recession

Singapore, March 26

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Singapore’s economy suffered its biggest contraction since the financial crisis during the first quarter as the coronavirus pandemic escalated, data showed today, an ominous sign of the devastation being inflicted on the global economy.

The finance minister, meanwhile, announced 48 billion Singapore Dollars ($33 billion) in fresh stimulus, taking to about 55 billion Dollars the amount so far pledged by the government to help the export-reliant financial hub weather the downturn.

One of the world’s most open economies which is viewed as a barometer for the health of global trade, Singapore is now heading for a deep recession this year after shrinking 2.2% on-year in January-March.

“Covid-19 is like an economic tsunami hitting Singapore’s shores,” said Selena Ling, head of research and strategy at the city-state’s OCBC Bank.

Singapore is one of the first economies to report growth data since the virus outbreak began, and the dismal figures add to signs the world is heading for a deep, painful recession with more than three billion people now under lockdown.

Governments and central banks around the world have been unleashing unprecedented measures to battle the fallout from the pandemic, with US Senate leaders agreeing on a $2 trillion deal for the hard-hit American economy.

Markets have been in a tailspin as the pandemic accelerates, with more than 20,000 deaths reported worldwide, and all eyes are on data to be released in the US later Thursday expected to show a surge in people applying for jobless benefits.

The Singapore economy’s 2.2% contraction was the worst quarterly, on-year figure since 2009 during the financial crisis, the last time the city-state was plunged into recession. Compared with the previous quarter, GDP fell 10.6%, as all sectors of the economy were battered, according to advance estimates released by the trade ministry. — PTI