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Singapore faces 6-per-cent recession after lockdown

Singapore’s central bank on Monday said that the country’s economy, the wealthiest per-capita in South East Asia, could shrink by 6 per cent in 2020.

Based on a survey of 26 economists by the Monetary Authority of Singapore (MAS).

“The projected decline tops previous warnings of a 5.8-per-cent contraction and comes after a worse than expected 13.2-per-cent gross domestic product (GDP) slump during the second quarter.

“A tightening in global financial conditions, an escalation in the global COVID-19 situation, as well as heightening of U.S.-China tensions” are likely to be the main causes of recession, according to the MAS.

Singapore, a tiny city-state that depends on foreign trade and investment, saw its economy hit hard by an April 7 to June 2 lockdown that forced many businesses to close and year-on-year retail sales to fall by more than half.

Singapore’s Ministry of Trade and Industry previously warned that the economy could shrink by up to 7 per cent in 2020.

The government has revised the 2020 budget four times, pledging fiscal spending of around 20 per cent of GDP to try thwart the impact of the pandemic and related restrictions.

Though tourist arrivals are still not allowed, Singapore is resuming “essential” or business travel with several countries, including China, Indonesia, Japan and Malaysia.

Singapore has recorded more than 57,000 cases of the novel coronavirus  almost all among low-wage migrant workers crammed into dozens of dormitories  but only 27 related deaths. 

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