Singapore experienced the worst economic setback in its history in 2020 due to the coronavirus pandemic, even if the recession turned out to be a little less severe than expected, according to official figures released on Monday.
The recession amounts to 5.8% of the GDP, while official forecasts counted on 6.5%, in this city-state where the vital sectors of trade and tourism have been severely affected.
Singapore plunged into its first recession since the 2008 global financial crisis in the second quarter of 2020, when the government shut down most workplaces as part of drastic measures to contain infections.
The Asian island, with one of the most open economies in the world, is regarded as an indicator of the health of world trade, and the dramatic deterioration of its economy has sounded the alarm.
The economy recovered in the second half of the year, however, and key sectors such as manufactures began to recover.
In the fourth quarter, the economy shrank 3.8% year-over-year, less than expected, according to preliminary growth data released by the Commerce Department.
The contraction is not as severe as feared due to strong exports of some goods, Song Seng Wun, regional economist at CIMB Private Banking, told AFP. He expects a “rebound of around 6%” this year.
“We see companies continue to benefit from further easing of restrictions and stronger global demand for (microchips) and drugs,” he also said.
The city-state was first praised for its control of the epidemic in its infancy, but resurgences then appeared in homes of low-paid foreign workers.
The epidemic has slowed sharply in recent weeks, however, and only a handful of cases are listed each day.
Last week, authorities launched a vaccination campaign against Covid-19, making Singapore one of the very first Asian countries to do so.
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