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Coronavirus-Hit Singapore Falls Into Recession

  • Singapore’s dismal numbers are yet another indication that the global economy is heading towards a deep and severe downturn.
  • In the second quarter, Singapore fell into recession as the economy contracted over 40%, preliminary data showed Tuesday.
  • This represented the second consecutive quarter of contraction since the city-state first entered a recession after it was hit hard by the global financial crisis in 2009.
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Singapore is one of the most open economies in the world and is seen as a barometer for global trade strength, and the dismal numbers are yet another indication that the global economy is heading towards a deep and severe downturn.

In the second quarter, Singapore fell into recession as the economy contracted over 40%, preliminary data showed Tuesday, with the trade-dependent city-state hit by the coronavirus.

According to trade ministry statistics, Singapore’s economy shrank 41.2 percent quarter-on-quarter and 12.6 percent on-year between April and June, and analysts said it was the worst quarterly figure ever reported in Singapore for gross domestic product.

This represented the second consecutive quarter of contraction since the city-state first entered a recession after it was hit hard by the global financial crisis in 2009.

The Ministry of Trade & Industry said the huge contraction was due to restrictions imposed from early April to early June to prevent the spread of the coronavirus, which included several companies being closed down. It also blamed the shrinkage on weak external demand.

The figures showed that the construction sector contracted by 54.7 percent year-on-year and 95.6 percent as compared to the previous quarter. The services sector shrank year-on-year by 13.6 percent, with tourism-related services and the air transport industry being hammered hard because of travel bans.

However, in the second quarter, the manufacturing sector expanded by 2.5 percent on-year, mainly due to an increase in output in biomedical manufacturing, the ministry added.

Tuesday’s release of data is based on “advance estimates.” The statistics are also revised once data from the full quarter is ready.

Initially, Singapore kept its coronavirus outbreak in check through stringent testing and contact-tracing system, only for major outbreaks to spread later through crowded dormitories sheltering low-paid migrant workers.

It has had more than 46,000 coronavirus cases reported, including 26 deaths.

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