APD | Singapore at risk of economic recession due to COVID-19

By APD writer Alice

The possibility of a recession looms in Singapore and the country’s economy will take a hit, Singaporean Prime Minister Lee Hsien Loong has said.

In a recent interview, he said the impact, particularly in the next few quarters, will be significant as the country battles a very intense outbreak.

Singapore is imposing a travel ban on visitors from China following the outbreak of the virus, although China is the biggest source of visitors to the Southeast Asian country.

Therefore, the number of tourists to Singapore will sharply decrease, resulting in falling revenue from the tourism industry. The Singapore Tourism Board forecast visitor arrivals to decline by between 25 and 30 percent this year.

And surely, the local economy will be greatly impacted as tourism is one of the main economic growth drivers.

During his visit to Changi Airport Terminal 3, PM Lee spoke to a range of workers who told him that the virus has already impacted flights and businesses.

The leader said he believes the coronavirus outbreak’s impact on Singapore’s economy has already exceeded that of the SARS epidemic in 2003.

He said he does not know whether the economy falls into a recession or not but the impacts of COVID-19 are unavoidable, especially in the aviation sector, as one-third of flights have been cut.

Experts predict the country’s economy will expand between 0.5 percent and 2.5 percent this year.

Nine more COVID-19 cases have been confirmed in Singapore, bringing the total to 67, the country’s Ministry of Health said on February 14.

Singapore has been trying to contain the coronavirus, which was first reported in the Chinese city of Wuhan in December 2019.

During the SARS outbreak, it took five months – from March to July 2003 – for the virus to be eradicated in Singapore.

The SARS outbreak peaked at 238 infections and 33 deaths. Consequently, the Singapore economy registered a drop of 4 percentage points in GDP in the second quarter of that year. But the outbreak was contained by May 2003 and in the third quarter GDP climbed by 5.6 percentage points. The country eventually reported a full-year expansion of 4.5 percent for 2003, higher than the 3.9 percent of the previous year.

It seems that the COVID-2019 outbreak will last even longer and of course, its impacts on the Singaporean economy will be greater, said analysts.

(ASIA PACIFIC DAILY)