Singapore is one of the worst-hit countries by Covid-19 in Southeast Asia with 14,951 cases currently. For the safety of its people and to stop the infection chain, Singapore announced a circuit breaker which has been extended until the 1st of June 2020. This pandemic may cause Singaporeans to pay a price, literally!
The Monetary Authority of Singapore (MAS) has confirmed that the country will enter into a recession this year. Additionally, Vulcan Post reported that Singapore had a negative first quarter for the FIRST time since the global financial crisis in 2009.
As more and more businesses close during the circuit breaker period, MAS warned that there will be a sharper contraction in the second quarter of the year.
“At this juncture there remains significant uncertainty over the severity of the recession, as well as the eventual recovery.”
The length of the recession is still unknown due to factors such as the transmission of the virus and the time taken for other countries to recover fully from this pandemic. MAS added that due to the nature of the pandemic, containment measures can only be removed gradually.
MAS highlighted three risks to Singapore’s economy from the Covid-19 pandemic:
1. If stricter containment measures are implemented around the world, this would further constrain economic activities
2. Resuming global economic activity will be delayed if the pandemic lasted longer than expected
3. It’s difficult to achieve complete containment due to the virus nature of being “more contagious but less detectable” than SARS, consumer and business spending will be delayed
Industries that will be hit the most are tourism and also the IT sector. Workers in retail trade, food and beverage (F&B) and recreation services are also most vulnerable to lay-offs. Some firms are also expected to reduce workers’ salaries.
What do you think of this economic downfall Singapore is set to experience? Let us know in the comments section!
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