Visitors wear protective face masks at the Marina Bay waterfront in Singapore on January 26, 2020.
Roslan Rahman | AFP | Getty Images
Singapore on Monday downgraded its growth forecast for 2020 as the country grapples with one of the highest numbers of coronavirus cases outside China.
The Ministry of Trade and Industry said the Singapore economy is expected to grow by around 0.5% this year, and downgraded its forecast range for the change in annual gross domestic product to between -0.5% and 1.5%. That’s worse than the earlier projections of a growth between 0.5% and 2.5%.
“The (earlier) forecast was premised on a modest pickup in global growth, along with a recovery in the global electronics cycle, in 2020. Since then, the outbreak of the coronavirus disease 2019 (COVID-19) has affected China, Singapore and many countries around the world,” the ministry said in a statement.
The ministry outlined how the virus outbreak could affect the Singapore economy:
- Outward-oriented sectors, such as manufacturing and wholesale trade, will be hit by weaker growth in Singapore’s major demand markets including China.
- The tourism and transport sectors have been “badly affected” by “a sharp fall” in tourist arrivals, particularly those from China.
- Likely fall in domestic consumption as people cut back on activities such as shopping and dining out.
“As the COVID-19 situation is still evolving, MTI will continue to monitor developments and their impact on the Singapore economy closely,” said the ministry.
Singapore, a tiny Southeast Asian country, has reported 75 confirmed coronavirus cases as of Sunday noon, according to the Ministry of Health. Of those, 19 have been discharged, the ministry said.
The country was also among the worst hit by the global SARS epidemic in 2003. And on Friday, Prime minister Lee Hsien Loong said the economic hit from the coronavirus disease — formally named COVID-19 — has already exceeded that of SARS, reported local newspaper The Straits Times.
Lee also suggested that it’s possible Singapore could enter a recession as a result of the recent virus outbreak.
The Singapore government has announced several measures to help affected sectors tide through, and is expected to announce one of its biggest budgets yet to soften the economic blow from the outbreak.
Singapore’s fourth-quarter performance
Singapore’s economy grew by 1% year-over-year in the fourth quarter of last year — better than the earlier estimate of 0.8%, said the Ministry of Trade and Industry.
For the whole of 2019, the Southeast Asian economy expanded by 0.7%, the ministry said. That’s the slowest growth Singapore has seen since 2009.
The main drag on Singapore in the October-to-December quarter was manufacturing, which shrank by 2.3% from a year ago, according to the ministry.
It added that the sector “was weighed down by output declines in the electronics, chemicals, transport engineering and general manufacturing clusters,” which offset expansions in the sub-sectors of biomedical manufacturing and precision engineering.
The construction sector, meanwhile, grew by 4.3% year-over-year in the fourth quarter, said the ministry. That growth was supported by projects in both the public and private sectors, it added.