Publish: 04 Jan 2021, 01:03 pm
Singapore's economy suffered its worst ever annual contraction in 2020 as the coronavirus pandemic hammered the vital trade and tourism sectors of the city-state, according to official data on Monday.
But the 5.8 percent decline was not as bad as feared—official forecasts predicted a fall of up to 6.5 percent—as economic activity picked up with the easing of the curbs, reports AFP.
The financial hub plunged into its first recession since the 2008 global financial crisis in the second quarter when the government closed most of its workplaces as part of drastic measures to contain infections.
One of the most open economies in the world, Singapore is seen as a bellwether for the health of global trade, and the dramatic deterioration of its economy rings alarm bells.
But the curbs were eased in the second half of the year, and key sectors of the economy, such as manufacturing, began to recover.
In the fourth quarter, the economy shrank 3.8% year-on-year, less than expected, according to preliminary growth data released by the Ministry of Trade.
Song Seng Wun, a regional economist with CIMB Private Banking, told AFP the contraction was not as bad as feared due to strong exports of some goods.
Song said he expects a “rebound of around six percent” this year.
“We are seeing businesses continuing to benefit from the further easing of restrictions and stronger global demand for (microchips) and medicines,” he said.
Singapore's small economy is typically first hit by external shocks before ripples spread across the region. However, it usually recovers quickly from any downturn.
The city-state won praise for keeping the pandemic in check in the early stages only for serious outbreaks later on in crowded dormitories housing low-paid migrant workers.
But the outbreak has slowed markedly in recent weeks, and only a handful of cases are recorded daily.
Authorities launched a coronavirus vaccination campaign last week, making it one of the first Asian nations to launch inoculations.