Singapore’s economic situation is ‘dire’ as global coronavirus resurgence looms, central bank says
Singapore’s economy is still in a “dire” situation due to the coronavirus pandemic, with unemployment and corporate bankruptcies likely to increase in the coming months, the country’s central bank said Thursday.
The Southeast Asian economy entered a technical recession after shrinking by 41.2% in the second quarter compared with the previous quarter, according to advance estimates released this week by the Ministry of Trade and Industry. Its official forecast is for the economy to contract between 4% and 7% this year — which would be the most severe downturn since the country’s independence in 1965.
A technical recession is defined as two consecutive quarters of quarter-on-quarter contraction in gross domestic product — a broad measure of the value of goods and services produced in an economy.
“We are not at the beginning of the end, but rather the end of the beginning,” said Ravi Menon, managing director of the Monetary Authority of Singapore, which is the country’s financial regulator and central bank.
“The recovery is likely to be slow and uneven, weighed down by renewed outbreaks of infection here or abroad,” he added. “We will enter 2021 with higher levels of debt, in both the corporate and household sectors, which will act as a further drag on growth and could become a source of vulnerability.”