The fall in GDP was due to «circuit breaker» measures, which lasted from 7 April to 1 June to slow the spread of Covid-19, as well as weak external demand amid a global economic downturn as a result of the pandemic.
Singapore's economy shrank 13.2 percent in the second quarter of 2020 on a year-on-year basis, worsening from -0.3 percent in the previous quarter, according to data released by the Ministry of Trade and Industry (MTI) on Tuesday.
Advance estimates published mid-July had predicted a 12.6 percent year-on-year contraction for the quarter. The ministry also narrowed its growth forecast for the year to -5 percent to -7 percent, from -4 percent to -7 percent previously.
The worst-hit sectors were construction (-59.3 percent y-o-y), transportation and storage (-39.2 percent y-o-y), accommodation and food services (41.4 percent y-o-y) and business services (-20.2 percent y-o-y).
Finance Sector Resilient
The finance and insurance sector, however, expanded 3.4 percent year-on-year, moderating from 8.3 percent growth in the previous quarter, underpinned by steady expansions in insurance and other auxiliary activities, with the latter supported in turn by an acceleration in the adoption of digital payments.
The ministry said it expects the finance and insurance, as well as the information and communications sectors to expand this year.
«The former will be supported in part by the strong demand for digital payment processing services, while the latter will benefit from firms’ continued demand for IT and digital solutions,» MTI said.
Uncertain Outlook
«Notwithstanding the narrowing of the forecast range, there continues to be significant uncertainty over how the Covid-19 situation will evolve in the coming quarters, and correspondingly, the trajectory of the economic recovery in both the global and domestic economies,» MTI said in the statement.
