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S’pore economy contracts 5.8% in 2020, worst recession since independence: MTI advance estimates

SINGAPORE — Singapore’s economy shrank 5.8 per cent for the whole of last year, based on advance estimates from the Ministry of Trade and Industry (MTI) released on Monday (Jan 4).

A woman wearing a protective face mask walking in Singapore's business district during a partial lockdown on May 27, 2020.

A woman wearing a protective face mask walking in Singapore's business district during a partial lockdown on May 27, 2020.

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SINGAPORE — Singapore’s economy shrank 5.8 per cent for the whole of last year, based on advance estimates from the Ministry of Trade and Industry (MTI) released on Monday (Jan 4).

This is the worst full-year recession since independence as the economy continues to be weighed down by the effects of the Covid-19 pandemic. 

However, the advance estimates were slightly better than MTI’s forecast of a 6.0 to 6.5 per cent economic contraction for the year. 

In the fourth quarter of last year, the economy contracted by 3.8 per cent compared with the same period a year ago, an improvement on the 5.6 per cent contraction in the third quarter. The fourth-quarter estimates are derived largely from data in October and November 2020. 

On a quarter-on-quarter seasonally adjusted basis, Singapore’s economy grew by 2.1 per cent, after a 9.5 per cent growth in the third quarter. 

The growth in the fourth quarter was led by the manufacturing sector, specifically the electronics, biomedical manufacturing and precision engineering clusters, which grew by 9.5 per cent compared with the same period a year ago. 

The construction sector was the worst performer, shrinking by 28.5 per cent over the same period. Still, this was an improvement on the sector’s 46.2 per cent contraction in the previous quarter. 

“The improved performance of the sector came on the back of the resumption of more construction activities in the fourth quarter as compared to the previous quarter,” MTI said. 

Output in the wholesale and retail trade as well as the transportation and storage sectors fell by 11 per cent in the fourth quarter. 

In particular, wholesale trade and water transport continued to shrink owing to sluggish external demand, as major economies are still struggling to cope with the pandemic. 

The air transport segment remains weak because of prevailing global travel restrictions and subdued travel demand. 

Accommodation and food services, real estate, administrative and support services and other services industries contracted by 9.9 per cent, compared with the fourth quarter a year ago. 

The accommodation segment continued to shrink as a result of weak tourism demand, while food services and other services industries, which include arts and entertainment, have been affected by safe-distancing rules to combat the coronavirus. 

The information and communications, finance and insurance as well as professional services sectors grew by 0.2 per cent.

Dr Koh Poh Koon, deputy secretary-general of the National Trades Union Congress, said that industries such as the electronics, biomedical manufacturing and precision engineering clusters, and the information and communications as well as finance and insurance sectors, were showing signs of recovery.

He urged workers to “adopt a growth mindset” to seize new opportunities. “Skill up if it means opening doors to more possibilities in the new normal,” he said in a Facebook post. 

Related topics

economy MTI Trade and Industry Ministry GDP

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