With the world’s economies experiencing tension amid the uncertainty brought about by the Covid-19 pandemic, a senior DBS Bank economist has pointed out that things are not looking good for Singapore either and that a full-year recession “appears inevitable”.
In a research note on Thursday (March 19), Mr Irvin Seah projected a 0.5 per cent drop in Singapore’s economy due to the current haywire-state of the international economy.
“This is evolving into a ‘self-induced’ global recession,” he said. “Being a small and open economy, Singapore will not be spared. A recession in Singapore appears inevitable.”
Mr Seah also noted that this economic forecast expects for Singapore to be hit harder than it was during the Sars (Severe Acute Respiratory Syndrome) in 2003 crisis and the global financial crisis in 2008.
Mr Seah’s prediction comes after economists Chua Hak Bin and Lee Ju Ye of Maybank Kim Eng early last month (Feb 5) cut its prediction of Singapore’s 2020 economic growth from its original forecast of 1.8 per cent to 1.1 per cent.
The economists referred to measures taken at that time to prevent the spread of Covid-19, such as the banning of travellers from mainland China from entering Singapore. They noted that the Government had taken drastic measures to contain the outbreak, “which may hurt growth in the near term”.
However, the economists expected the drop to only last temporarily. They said: “We expect the negative impact to be short-lived, with growth rebounding from the second quarter onwards.”
They had also contrasted the Covid-19 pandemic currently being experienced by Singapore to the 2003 Sars outbreak and said that the economy would be affected differently mainly due to the increased number of travellers from Wuhan to Singapore.
They had noted that whereas travellers from Wuhan made up 9.3 per cent of visitors to Singapore in 2003, the number in 2019 was a significant jump to 19 per cent.
The implications of the pandemic on the international manufacturing sector were also expected to have a “spillover” effect on Singapore. /TISG