A man in a mask walks in the background on April 1, 2020, walking on Marina Bay Sands in Singapore’s Central Business District.
Suhaimi Abdullah | Getty Images
SINGAPORE – Singapore’s economy contracted 8.8 percent in the third quarter from a year earlier – better than initial estimates, the country’s trade and industry ministry said on Monday.
According to official data, the Southeast Asian country has previously estimated that its economy will shrink by 7% annually in the July-September quarter. Economic performance in the third quarter was even better than the 13.3% year-on-year contraction recorded in the second quarter, data show.
On a quarter-on-quarter seasonally adjusted basis, Singapore’s gross domestic product or GDP grew 9.2% in the three months to the end of September, offset by a contraction of 13.2% in the second quarter, the ministry said.
“Improved performance in Singapore’s economy followed a phased resumption of activities in the third quarter following a circuit breaker applied between April 7 and June 1, 2020, as well as a surge in activity in major economies during the quarter,” the ministry said in a statement.
“Circuit breaker” refers to the country’s partial lockdown measures aimed at spreading the coronavirus. Singapore has begun lifting some restrictions since early June – allowing most activities to resume – but some measures remain, such as wearing a mandatory mask and a cap on gatherings.
The recovery of Singapore’s economy … will largely depend on how the global economy performs and whether Singapore continues to control the domestic COVID-19 situation.
Ministry of Trade and Industry of Singapore
Here’s how the city-state performed in the third quarter:
- The manufacturing industry continued to perform better than the service industries, whose production increased by 10% during the year;
- But contraction in construction activities by 46.6% compared to a year earlier – the third consecutive quarter of contraction;
- Under services, the finance and insurance sector – which is a bright spot – grew 3.3% year-on-year;
- Transport and storage contracted by 29.6% compared to a year ago, the worst performing service sector.
Return to growth in 2021
Singapore’s economy is now expected to shrink between 6% and 6.5% in 2020 compared to a year ago, the ministry said. It is shorter than the 5% to 7% contraction of the previous official forecast range for this year and will be the worst economic recession in the country.
According to MTI, the Southeast Asian city-state will bounce back from %% to grow% next year.
“The recovery of the Singapore economy is expected to be gradual in the coming year, and it will largely depend on how the global economy performs and whether Singapore is able to control the domestic COVID-19 situation,” he said.
Economists at DBS, the country’s largest bank, said Singapore’s economy was “improving”, largely due to the local outburst of Kovid-1.
“The despair and frustration that dominated the global background for most of the year is slowly giving way to the hope and optimism of a 20-year recovery when we move into 2021,” they wrote in Singapore’s Vision report last week.
DBS economists expect Singapore’s economy to shrink by 6% this year, before turning to 5.5% growth in 2021.
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