Hit by the circuit breaker and widespread closures of businesses, Singapore has reported a 41.2-percent contraction in its economy for the second quarter of the year. Singapore has entered a technical recession, with its economy shrinking 12.6 percent year-on-year in the second quarter of 2020, following -0.3 percent growth in the first quarter, according to advance estimates by the Ministry of Trade and Industry published on Tuesday.
A survey of economists had previously predicted a 10.5 percent contraction. MTI said the weak economic output could be attributed to the circuit breaker from April 7 to June 1, during which non-essential services and most workplaces were closed to limit the spread of Covid-19.
Faring the worst was the construction sector, which contracted 54.7 percent from the year before and 95.6 percent from the first quarter, as a result of manpower disruptions and the closure of almost all worksites during the period. The service industry contracted by 13.6 percent from the year before (-37.7 on-quarter), with tourism-related sectors like accommodation and the air transport sector severely affected by global and domestic travel restrictions.
The numbers clearly reflect the extent of the challenges facing our economy amid the COVID-19 pandemic and the hard work ahead of us to restore the economy, Chan Chun Sing, Minister of Trade and Industry, said in a Facebook post on Tuesday morning.
We expect the recovery to be a slow and uneven journey, as external demand continues to be weak and countries battle the second and third waves of outbreaks by reinstating localized lockdowns or stricter safe distancing measures,» Chan said.
In May, the Singapore government downgraded the city-state’s growth forecast for 2020 to -4 percent to -7 percent.
The economy was one of the top issues on voters’ minds in the general election, held on Friday. Seeking a fresh five-year mandate, Prime Minister Lee Hsien Loong warned earlier in July of more retrenchments and that the worst of the economic downturn is yet to come.
The ruling People’s Action Party kept its grip on power but fared disappointingly with 61.2 percent of the popular vote. The opposition Workers’ Party increased its representation in parliament to a record 10 seats of the 93 at stake.