Singapore GDP cut as virus hits trade, supply chains

Singapore has downgraded its economic forecast for this year to reflect the intensifying impact of the Covid-19 pandemic, with the government now expecting the economy to shrink by as much as 7pc.

GDP in Singapore, which relies heavily on exports and is often seen as a bellwether of global trade, is likely to decline by 4-7pc in 2020, down from the previous forecast of a 1-4pc decline that was made in March.

The downgrade is driven by worsening disruptions to major world economies because of the coronavirus outbreak, and the impact of Singapore's "circuit-breaker" measures to stem the spread of the virus, the trade and industry ministry said.

Manufacturing, wholesale trade and transportation have been hit by sharper-than-expected slowdowns in key markets, as well as prolonged supply chain disruptions. Sectors such as marine and offshore engineering and construction have been affected by labour shortages that were caused partly by a coronavirus outbreak in foreign worker dormitories, it said.

Singapore is the world's biggest bunkering hub, a major port and a regional refining and oil trading centre.

The government today announced another S$33bn ($23bn) of economic support measures, in the fourth special budget since the coronavirus outbreak emerged. The new funds take government spending, to mitigate the impact of Covid-19, to around S$100bn. This is equivalent to almost 20pc of GDP, making it one of the world's largest stimulus packages on this basis.

Singapore shut many non-essential businesses and imposed some restrictions on movement in early April as part of the coronavirus circuit-breaker measures. The restrictions are due to start being lifted next month. Singapore has 32,343 confirmed cases of coronavirus, the fifth highest in Asia-Pacific behind India, China, Pakistan and Bangladesh, but just 23 deaths.

By Kevin Foster