After last week it reported a higher-than-expected GDP contraction, Singapore’s economy contracted by 42.9% on a seasonally adjusted basis. Analysts were expecting a 37.4% contraction.
On a year-on-year basis, the gross domestic product shrank by 13.2%, worse than 12.6% expected by the Ministry of Trade and Industry. Currently, the country is in a technical recession. The fall in GDP is due to the partial lockdown imposed to slow the spread of COVID-19. Starting June, some of the restrictions have been eased, and now the economy is almost fully reopened. To this date, it is the most dramatic economic contraction in Asia.
The ministry expects for the GDP to contract this year between 5% -7%. But the numbers are open for discussion given these challenging times.
Today, Singapore’s government announced a new stimulus package worth $5.8 billion to help its battered economy. The stimulus package will consist of many extensions of the existing policies, such as $136.5 million relief for the aviation industry, cash payouts for people who don’t have a job due to the pandemic and low-wage workers, and an extension of wage subsidies until March 2021. A significant amount will go to tourism, as the government encourages domestic tourism.
Overall, this is the fifth stimulus package released by the government. Altogether, they’re worth around 20% of GDP.
As of today, the country reported almost 56,000 cases.
Currently, USD/SGD is trading at 1.3700.
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Sources: cnbc.com, channelnewasia.com