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Singapore lowers 2020 GDP outlook for the third time

The city-state has lowered its GDP forecast to a contraction range of -4 per cent to -7 per cent as officials and analysts warn of more economic disaster ahead

Singapore has lowered its 2020 gross domestic product forecast for the third time as the economy prepares for its deepest ever recession. The city-state lowered its GDP forecast to a contraction range of -4 per cent to -7 per cent compared with the prior range of -1 per cent  to -4 per cent.

Singapore’s economy shrank 0.7 per cent  year-on-year in the first quarter and 4.7 per cent on a quarter-on-quarter, a less severe decline than advance estimates, although officials and analysts warned of more disaster ahead.

Following the news, the Singapore central bank (MAS) chief economist Edward Robinson said monetary policy remains unchanged and will next be reviewed in October, as planned.

Singapore also lowered its 2020 forecast for all non-oil domestic exports to -4.0 per cent to -1.0 per cent, from -0.5 per cent to 1.5 per cent previously.

On the other hand, exports have helped the economy in recent months mainly due to a surge in demand for pharmaceuticals. That demand was also seen in factory data with industrial output increasing 13 per cent in April on a year-on-year basis, as pharmaceuticals production more than doubled.

Singapore’s main price gauge contracted for the third consecutive month in April, falling 0.3 per cent and hitting a 10-year low.

Singapore is among the countries with the highest number of coronavirus infections in Asia, and said that the easing of the lockdown from next month will only be gradual.

The government first cut its GDP forecast in February to -0.5 per cent to 1.5 per cent, from 0.5 per cent to 2.5 per cent previously.

 

FURTHER READING: Singapore Airlines cuts capital spending by at least 12 per cent

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