Singapore is a “very open” economy. But, Singapore must prepare for the worst from the coronavirus outbreak.
“Coronavirus has been threatening global public health-care systems, financial markets, and economics around the world,” said the country’s Deputy Prime Minister Heng Swee Keat.
Heng added, “The Singapore economy is very open and connected. We’re a very major business and financial hub, closely integrated with the global economy so this is a serious crisis.”
According to CNBC, the crisis is on three fronts. The first is public health-care front. Secondly is the financial front. Third is the economic front. These fronts are interacting in unpredictable ways and unprecedented time.
The Southeast Asian country was one of the earliest outside China to report cases of the coronavirus. Last week, it became one of the first globally to release data on first-quarter economic performance, providing a glimpse of how the virus which has spread to over 200 countries and territories. Hence, it could hit the global economy.
GDP Contraction, Economic Downgrade
Singapore’s gross domestic product contracted by 2.2% year-over-year and 10.6% quarter-over-quarter in the first three months of 2020. The data based on the official preliminary estimates.
The year-over-year contraction was the deepest the country has recorded since the first quarter of 2009 during the global financial crisis.
Heng said in a speech last week about the worst economic in Singapore. He said, “Singapore will likely experience its “worst economic contraction since independence” after official GDP forecasts for this year was downgraded from an annual change of between -0.5% and 1.5% to between -4.0% and -1.0%.”
The action by the central bank “is an absolutely correct one,” said Heng. But he added that “the firepower” for managing the economic fallout from the coronavirus “has to be fiscal policy.”
No Complete Lockdown
Singapore has reported 844 cases of COVID-19, including three deaths, according to the health ministry.
As the outbreak grows in more countries, Singapore has taken stricter measures such as closing its borders to visitors and limiting crowd sizes. But the country has stopped short of implementing a complete lockdown, yet schools and businesses still open. Also, work from home is applying in Singapore.
More and more restrictive measures at restaurants and public places have also been implemented.
