An overview of the Marina Bay Sands, the ArtScience Museum, the Singapore Flyer and the Central Business District on June 19, 2020 in Singapore.
Suhaimi Abdullah | fake pictures
Singapore’s economy contracted 12.6% in the second quarter compared to the previous year, according to advance estimates from the Ministry of Commerce and Industry released on Tuesday.
Analysts polled by Reuters expected the Southeast Asian economy to shrink by 10.5% year-over-year in the three months ended June 30.
In the first quarter, Singapore’s economy contracted by 0.7%, according to the ministry.
Economic performance in the second quarter worsened due to the implementation of partial blocking measures, which the Singapore government called a “circuit breaker”, with the aim of reducing the spread of the coronavirus.
Those measures, which began in early April, involved closing most workplaces (except those offering essential services) and temporarily closing all schools. The “circuit breaker” lasted most of the second quarter, and the Singapore government provided some measures starting in early June.
The restrictions harm companies that depend on domestic consumption. The country’s retail sales fell 52.1% in May compared to the previous year, the biggest drop since records began in 1986, Reuters reported.
Meanwhile, the city’s state’s trade-oriented sectors have also been hit by sluggish global activity and an outbreak of tensions between the United States and China.
But Alex Holmes, an Asian economist at consultancy Capital Economics, said activity in Singapore has picked up since the easing of partial closure measures last month.
“While many industries, especially tourism and hospitality, will continue to suffer, the economy should recover faster than others in the region,” he wrote in a note last week that anticipated Singapore’s second-quarter economic performance.
“The key reason for optimism is the record size of the government stimulus package, which is equivalent to about 20% of GDP,” he added.
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