SINGAPORE (AFP) – Singapore’s embattled economy could shrink by as much as seven per cent this year, which would be the worst reading since independence, with the government saying yesterday the coronavirus pandemic had throttled the key export sector.
The city-state is seen as a bellwether of the global economy and the historic contraction highlights the extreme pain being wrought on countries by the killer disease.
The Trade Ministry’s forecast – which was a downgrade from the four per cent contraction predicted in March – came as official data showed the economy shrank 0.7 per cent on-year in the first three months of the year, while it reduced 4.7 per cent from the previous quarter.
The financial hub is one of the world’s most open economies, and is usually hit hardest and earliest during any global shock.
The ministry said the new estimate was made “in view of the deterioration in the external demand outlook” and the partial lockdown imposed domestically. A contraction of seven per cent would be the worst since the city’s independence in 1965.
Shutdowns in major markets such as the United States, Europe and China have crippled demand for exports, and a halt in international air travel has hammered Singapore’s key tourism sector.