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Economists expect Singapore’s economy to contract by 11.8pc in Q2, 5.8pc for the year
SINGAPORE, June 15 — Economists expect Singapore’s economy to shrink by 11.8 per cent in the second quarter and 5.8 per cent this year, which would be the worst recession to hit Singapore if it were to come to pass.
This latest forecast, published in a quarterly survey by the Monetary Authority of Singapore (MAS), reverses the economists’ earlier projections of a 0.6 per cent expansion.
In the latest survey released today, economists said they expect the second quarter to bear the brunt of the full-year decline, as they predict the three months ending in June to contract by 11.8 per cent compared with the same period a year ago.
This was the quarter during which Singapore imposed its circuit breaker, between April 7 and June 1.
Their projections are well within the official forecast range by the Ministry of Trade and Industry, which expects the economy to contract by between 4 and 7 per cent in 2020.
The survey findings were a result of 23 economists’ responses to the survey sent out by the MAS on May 26.
Accommodation and food services are expected to be hit the hardest by the economic impact of the Covid-19 pandemic, with a 26 per cent contraction year-on-year, while wholesale and retail trade is also projected to shrink by 12.8 per cent.
Only manufacturing (2.2 per cent growth) and the finance and insurance (3.1 per cent growth) sectors are expected to come through relatively unscathed.
The unemployment rate is also forecast to go up to 3.6 per cent by the end of 2020. The current unemployment rate is 2.4 per cent, based on the Manpower Ministry’s report on how the labour market performed in the first quarter of 2020.
The number of people employed has declined by 25,600 in the quarter.
Headline inflation is expected to shrink by 0.5 per cent for the year, while core inflation — which strips away the costs of accommodation and private road transport — is predicted to decline by 0.5 per cent as well.
An escalation in the Covid-19 pandemic was cited by economists as the top concern that could push their projections even lower.
The worsening trade tensions between the United States and China, as well as uncertainties arising from a deteriorating labour market were two other downside risks pointed out by the economists.
As for what could lead the Singapore economy to perform better than they expected, economists list the containment of the Covid-19 outbreak as the top factor.
A stronger-than-expected recovery in the global economy, as well as more fiscal stimulus by governments were also cited. — TODAY
Source: https://www.malaymail.com/news/singapore/2020/06/15/economists-expect-singapores-economy-to-contract-by-11.8pc-in-q2-5.8pc-for/1875576