Singapore has joined the list of countries predicting economic shrinkage.
Even though multiple countries around the world have begun efforts to resume business and daily life, the damage has already been done by the COVID-19 pandemic. From lost business time to reduced customer bases, multiple levels of the world economy have shrunk considerably, and based on current estimates, it will take time for things to return to normal.
The newest addition to the list of contracting economies is Singapore. According to the southeast Asian country’s trade ministry, Singapore’s economy could contract by at least 7% this year. This contraction could lead to the largest recession the country has experienced since it became an independent nation.
“In view of the deterioration in the external demand outlook for Singapore as well as the expected economic impact of the CB (central bank) measures, the GDP growth forecast for Singapore for 2020 is downgraded,” the trade ministry said in a statement on Monday.
Last month, while a contraction was still anticipated, it was only estimated to be around 3%. However, estimations did not account at the time for the damage done to two of its most important industries: tourism and trading. Singapore is home to the second busiest ocean port in the entire world, and the city-state regularly welcomes three times its own population in tourists every year- around 15 million people. With tourism effectively on hold due to the pandemic, however, travel in and out of the country has slowed considerably, with the country’s economic stability slowing along with it.
If the pandemic can come to a satisfying conclusion relatively soon, Singapore, as well as the other affected countries, should be able to recover in due time. However, the biggest X factor at the moment is that nobody knows precisely how much longer the pandemic will last around the world. “Notwithstanding the downgrade, there continues to be a significant degree of uncertainty over the length and severity of the COVID-19 outbreak, as well as the trajectory of the economic recovery, in both the global and Singapore economies,” the ministry’s statement said.