This archive report was first published on 15 July 2020.
On July 15, 2020, Singapore's Ministry of Trade and Industry reported a historic contraction in the country's economy, with Gross Domestic Product (GDP) plummeting by 41.2% in the three months that ended in June, on a quarter-on-quarter annualized basis.
The severe economic downturn was largely attributed to the stringent coronavirus lockdowns that crippled businesses worldwide, with Singapore being no exception.
The manufacturing sector, which is heavily reliant on exports, was severely affected, with a decline of 23.1% on a quarter-on-quarter basis, compared to a growth of 45.5% in the first quarter. On a year-on-year basis, the sector grew by 2.5%, mainly due to a surge in output in the biomedical sector.
Other sectors that suffered significant declines include construction, which plunged 95.6% on a quarter-on-quarter basis, and the services sector, which declined by 37.7% on a quarter-on-quarter, annualized basis, and 13.6% year-on-year.
The tourism industry, including airlines, hotels, and restaurants, was also severely impacted by travel restrictions.
According to the International Monetary Fund, the global economy is expected to contract by 4.9% in 2020, with Singapore's GDP forecast to decline by 12.6% on a year-on-year basis, compared to economists' forecast of a 10.5% contraction.
Despite the dire economic situation, the central bank eased its monetary policy in March, and the government has pumped in nearly $72 billion worth of stimulus to mitigate the impact of the pandemic.
