A man with a mask on taking a walk at Marina Bay Sands in Singapore’s central business district seen in the background on April 1, 2020.
Suhaimi Abdullah | Getty Images
SINGAPORE — Singapore’s economy contracted by 5.8% in the third quarter compared to a year ago — coming in better than initial estimates, the country’s Ministry of Trade and Industry said on Monday.
The Southeast Asian country earlier estimated its economy would shrink by 7% year-on-year in the July-to-September quarter, according to official data. The third-quarter economic performance was also better than the 13.3% year-over-year contraction recorded in the second quarter, the data showed.
On a quarter-on-quarter seasonally adjusted basis, Singapore’s gross domestic product or GDP grew by 9.2% in the three months ended September, a turnaround from the 13.2% contraction in the second quarter, the ministry said.
“The improved performance of the Singapore economy came on the back of the phased resumption of activities in the third quarter following the Circuit Breaker that was implemented from 7 April to 1 June 2020, as well as the rebound in activity in major economies during the quarter as they emerged from their lockdowns,” said the ministry.
The “circuit breaker” refers to the country’s partial lockdown measures aimed at containing the spread of the coronavirus. Singapore has started lifting some restrictions since early June — which allow most activities to resume — but some measures remain, such as compulsory mask-wearing and a cap on gatherings.
Here’s how the different sectors in the city-state performed in the third quarter:
- Goods-producing industries continued to do better than the services industries, led by manufacturing which grew 10% year over year;
- But construction activities shrank by 46.6% compared to a year ago — the third consecutive quarter of contraction;
- Within services, the finance and insurance sector — which has been a bright spot — grew 3.2% year over year;
- Transportation and storage contracted by 29.6% compared with a year ago, the worst-performing services sector.
The Singapore economy is now expected to shrink between 6% and 6.5% in 2020 compared to a year ago, said the ministry. That’s narrower than the previous official forecast range of 5% to 7% contraction for this year, and would be the country’s worst economic recession.
The Southeast Asian city-state is expected to bounce back to grow by between 4% and 6% next year, according to MTI.
“The recovery of the Singapore economy in the year ahead is expected to be gradual, and will depend to a large extent on how the global economy performs and whether Singapore is able to continue to keep the domestic COVID-19 situation under control,” it said.
But with the local outbreak of Covid-19 largely under control, the Singapore economy is now “on the mend,” said economists from DBS, the country’s largest bank.
“Despair and disappointment that had dominated the global backdrop for much of the year is gradually giving way to hope and optimism of a recovery as we head into 2021,” they wrote in a Singapore outlook report last week.
The DBS economists expect Singapore’s economy to contract by 6% this year, before rebounding to a growth of 5.5% in 2021.