Singapore’s GDP contracts sharply – a warning for virus-hit global economy

Source:AFP Published: 2020/3/26 21:03:41

Singapore's economy suffered its biggest contraction since the financial crisis during the first quarter as the coronavirus pandemic escalated, data showed on Thursday, an ominous sign of the devastation being inflicted on the global economy. 

A container ship from Singapore arrives at Dapukou container terminal at Ningbo Zhoushan Port, East China's Zhejiang Province on Tuesday. Photo: cnsphotos

The finance minister meanwhile announced S$48 billion ($33 billion) in fresh stimulus, amounting to about S$55 billion the amount so far pledged by the government to help the export-reliant financial hub weather the downturn. 

Being one of the world's most open economies and which is viewed as a barometer for the health of global trade, Singapore is now heading for a deep recession this year after shrinking 2.2 percent year-on-year in January-March. 

"COVID-19 is like an economic tsunami hitting Singapore's shores," said Selena Ling, head of research and strategy at the city-state's OCBC Bank. 

Singapore is one of the first economies to report growth data since the virus outbreak began, and the dismal figures add to signs that the world is heading for a deep, painful recession with more than three billion people now under lockdown. 

Governments and central banks around the world have been unleashing unprecedented measures to battle the fallout from the pandemic, with US Senate leaders agreeing on a $2 trillion deal for the hard-hit American economy. 

Markets have been in a tailspin as the pandemic accelerates, with more than 22,030 deaths reported worldwide, and all eyes are on data to be released in the US later Thursday expected to show a surge in people applying for jobless benefits. 

The Singapore economy's 2.2 percent contraction was the worst quarterly, annual figure since 2009 during the financial crisis, the last time the city-state was plunged into recession. 

Compared with the previous quarter, GDP fell 10.6 percent, as all sectors of the economy were battered, according to advance estimates. The city-state is typically among the first countries to be hit during global crises.


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