JAKARTA (TheInsiderStories) – Singapore’ economic growth fell to 13.2 percent in the second quarter (2Q) of 2020 due to the circuit breaker measures that were implemented from April 7 to June 1 to slow the spread of COVID-19, said the ministry of trade and industry on Tuesday (09/11). Also included the suspension of nonessential services and closure of most workplace premises, as well as weak external demand amidst a global economic downturn precipitated by the COVID-19 pandemic.
On a quarter-on-quarter (QoQ) seasonally-adjusted annualized basis, the economy shrank by 41.2 percent in the second quarter. Earlier the Southeast Asian member countries has projected the GDP could contraction 5 – 7 percent throughout 2020
Official data from the ministry showed, in June of this year, total merchandise trade also contracted 6.6 percent, the industrial production -6.7 percent and consumer price index dropped to -0.5 percent compared to last year. The manufacturing sector grew by 2.5 percent on an annual basis in the 2Q, slower than the 8.2 percent growth in the previous quarter.
Growth during the quarter was primarily due to a surge in output in the biomedical manufacturing cluster. On the other hand, weak external demand and workplace disruptions during the circuit breaker period weighed on output in the chemicals, transport engineering and general manufacturing clusters.
On QoQ seasonally-adjusted annualized basis, the manufacturing sector shrank by 23.1 percent, a sharp reversal from the 45.5 percent expansion in the preceding quarter. The construction sector contracted by 54.7 percent in the 2Q compared to previous year, a significant deterioration from the 1.1 per cent decline in the last quarter.
Construction output also weakened on account of the circuit breaker measures, which led to a stoppage of most construction activities during the period, as well as manpower disruptions arising from additional measures to curb the spread of COVID-19, including movement restrictions at foreign worker dormitories. On a QoQ seasonally-adjusted annualized basis, the construction sector shrank by 95.6 per cent in the 2Q, far worse than the 12.2 per cent contraction in the preceding quarter.
Then, services producing industries contracted by 13.6 per cent on a year-on-year basis in the second quarter, steeper than the 2.4 per cent decline in the previous quarter. Within services, tourism-related sectors like accommodation and the air transport sector were severely affected by global and domestic travel restrictions, which brought visitor arrivals and air travel to a standstill.
Other outward-oriented services sectors, such as wholesale trade and water transport were adversely affected by a fall in external demand as many countries around the world grappled with the pandemic. Meanwhile, domestically oriented services sectors such as food services, retail and business services were significantly affected by the circuit breaker measures.
On a QoQ seasonally adjusted annualized basis, the services producing industries shrank by 37.7 per cent in the second quarter, extending the 13.4 per cent decline recorded in the preceding quarter.
The ministry highlighted that the escalation of the COVID-19 outbreak worldwide had led to a significant deterioration in the external economic environment. Since then, the disruptions to economic activity in major economies around the world have been more severe than expected.
Growth in the key Southeast Asian economies of Malaysia, Thailand and Indonesia is also expected to be weighed down by weak external demand and domestic consumption as a result of the COVID-19 outbreak. There remain significant uncertainties in the global economy.
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