Despite a contraction of 5.8 per cent in the economy of Singapore in the third quarter compared to a year ago, the numbers were better than had been previously estimated, said the Ministry of Trade and Industry of the country on Monday.
According to the previous estimates of the Southeast Asian country, the economy was predicted to shrink by 7 per cent year on year in the July-to-September quarter, showed official data of the country. According to the latest data, the economy of the country had contracted by 13.3 per cent year on year which made the performance of the latest completed quarter was much better.
In the three months ended September, the gross domestic product or GDP grew by 9.2 per cent on a quarter-on-quarter seasonally adjusted basis, the ministry said, which is a turnaround compared to the shrinking of 13.2 per cent recorded by the company in the second quarter.
“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.
In this statement, the “circuit breaker” was the measures that the country had taken to contain the spread of the pandemic such as the partial lockdown measures. Since early June, some restrictions were first removed in Singapore thereby allowing most economic activities to resume. However some measures are still in place such as compulsory mask wearing and a restriction on gatherings.
However analysts still believe that the continued recovery of the economy of Singapore will significantly depend on the overall recovery of the global economy as well as the manner in which Singapore is able to keep the pandemic under control domestically.
The ministry said that for the entire of 2020, it is now expected that the Singapore economy will contract between 6 per cent and 6.5 per cent compared to a year ago. That range is narrower than the previous estimates of the government of a contraction of between 5 per cent and 7 per cent for the full year and would have been the worst economic recession of the country.
According to MTI, it is expected that a growth rate of between 4 per cent and 6 per cent will be achieved by the Southeast Asian city-state next year.
“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.
Economists from DBS, the country’s largest bank said that the Singapore economy is now “on the mend” because of the fact that the local outbreak of Covid-19 has largely been brought under control.
“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.
(Adapted from CNBC.com)