Singapore’s gross domestic product (GDP) in the second quarter of 2020 may contract by 34.6 percent if we compare it to the first quarter, according to a report by UOB.
Singapore’s second quarter GDP will contract by 10.5 percent when compared to the same period in 2019.
For Singapore, this could possibly mark the start of a recession.
Barnabas Gan, an economist at UOB said, “We note that the uncertainty surrounding the length and severity of COVID-19, as well as the emergence of renewed US-China tensions continue to cloud Singapore’s trade prospects. Collectively, the quick deterioration of economic prospects both globally and domestically is expected to weaken Singapore’s labour market.”
According to the ministry of labour, the unemployment rate in Singapore also increased to 2.4 percent in the first quarter.
According to economists and analysts polled in a survey by the Monetary Authority of Singapore (MAS) last month, its economy is expected to contract by 5.8 percent this year.
In a similar survey carried out by the central bank earlier, the participants predicted a growth rate of 0.6 percent for Singapore.
The forecast comes as survey respondents cited an escalation in the COVID-19 pandemic as a key downside risk to Singapore’s growth outlook.
The contractions are mainly attributed to the coronavirus pandemic which has pushed the global economy into recession.
In Singapore, the lockdown measures introduced to curb the spread of the virus has also affected the city-state severely. When it comes to the construction sector, the MAS survey forecasts that it will contract 11.4 percent this year.
Private consumption is expected to contract by 5.2 percent.