The improvement came on the back of the phased re-opening of the economy, following the «circuit breaker» that was implemented between April 7 and June 1, 2020.
Singapore’s gross domestic product (GDP) in the third quarter of 2020 grew by 7.9 percent from the quarter before, based on advance estimates released by the Ministry of Trade and Industry (MTI) on Wednesday.
On a year-on-year basis, the economy contracted by 7 percent, an improvement from the 13.3 percent contraction in the second quarter, which was its worst quarter on record.
The ministry did not revise its full-year GDP outlook, which predicts an overall contraction of 5 to 7 percent.
The construction sector grew 38.7 percent from the previous quarter but was still down 44.7 percent on-year. Weak external demand, travel restrictions, and sluggish travel demand contributed to the 8 percent on-quarter decline in services-producing industries – still an improvement from the previous quarter’s 13.6 percent decline.
The manufacturing sector reversed its 0.8 percent on-year decline in the second quarter of 2020 to grow 2 percent in the third quarter. Quarter-on-quarter, the sector grew by 3.9 percent, supported by growth in electronics and precision engineering output, which were in turn driven by robust global demand for semiconductors and semiconductor manufacturing equipment, MTI said.
On Monday, Ravi Menon, chief executive of the Monetary Authority of Singapore said that up to 20 percent of the city-state’s trade-reliant economy faces «deep scarring» as a result of the Covid-19 pandemic, highlighting the aviation and tourism industries in particular.
The full extent of the crisis has not been seen yet, Menon said, noting that more bank loans and bankruptcies are expected, and that capital will be more difficult to raise in this environment.
In a funny sort of way, the pandemic has made us all a lot more sensitive and aware of how vulnerable we are to the forces of nature, Menon said.
