Singapore reports record 41.2% economic contraction in 2Q on pandemic

Second quarter's gross domestic product dropped 41.2% from the previous three months, Bloomberg cited data from the Ministry of Trade and Industry.

This is the biggest quarterly contraction on record and worse than the Bloomberg survey median of a 35.9% drop. Compared with a year earlier, the country's GDP dropped 12.6% in the second quarter, versus a survey median of -10.5%.

The deep slump shows the blow Singapore’s economy is taking from all sides amid the pandemic.

A plunge in global trade has hit the export-reliant manufacturing industry, while retailers have seen a record decline in sales after partial lockdown measures were imposed for several weeks last quarter.

The government, which has projected a full-year economic contraction of 4%-7%, didn’t provide a new forecast Tuesday.

Singapore is one of the first countries to report quarterly GDP data, and the figures show it’s taking a bigger hit than many others in Asia.

Japan’s GDP is seen declining more than 20% on an annualized basis in the second quarter from the previous three months, while data this week will probably show China’s economy returned to growth.

The dismal outlook in Singapore is pressuring the ruling People’s Action Party, which had its weakest performance ever in last week’s election. The government has already pledged about S$93 billion ($67 billion) in stimulus to shore up troubled businesses and households and to prevent a surge in retrenchments.

“The road to recovery in the months ahead will be challenging,” Trade and Industry Minister Chan Chun Sing said in a Facebook post. “We expect the recovery to be a slow and uneven journey, as external demand continues to be weak and countries battle the second and third waves of outbreaks by reinstating localized lockdowns or stricter safe-distancing measures.”

Manufacturing plunged 23.1%, compared with growth of 45.5% in the previous three months. Services shrank 37.7% with airlines, hotels and restaurants restricted during the partial lockdown, when “circuit breaker” measures were imposed from April 7 to June 1. 

Source: Bloomberg