Singapore's Economy Minus 7 Percent In Third Quarter, When Will It Recover?

JAKARTA - Singapore's economy is still experiencing contraction, or minus 7 percent in the third quarter of 2020 as a result of the COVID-19 pandemic that has hit the country and the rest of the world. However it was slightly better than the previous quarter, following the gradual reopening of the economy

Quoted from Channel News Asia , Wednesday, October 14, this contraction is better than the economic forecast of 7.6 percent, as surveyed by the Monetary Authority of Singapore (MAS) last month. The contraction experienced by Singapore in the second quarter of 2020 was recorded at 13.3 percent.

On a quarterly basis or quarter-on-quarter (qtq), Singapore's economy grew 7.9 percent in the third quarter, or rebounded from a contraction of 13.2 percent in the previous quarter. The manufacturing sector grew 2 percent year on year (yoy) in the third quarter, from a contraction of 0.8 percent in the previous quarter.

The Singapore Ministry of Trade and Industry said this growth was supported by the expansion of production output in the electronic and precision engineering clusters. It is underpinned by strong global demand for manufacturing equipment and semiconductors.

The manufacturing sector itself grew by 3.9 percent (qtq), a turnaround from a contraction of 9.1 percent in the second quarter. The construction sector shrank at a slower pace of 44.7 percent on a year-on-year basis in the third quarter, after a 59.9 percent drop in the previous quarter.

Meanwhile, the construction sector grew by 38.7 percent (qtq), rebounding from a sharp contraction of 59.4 percent in the second quarter when most construction activities had to be halted due to COVID-19. The contraction at that time was also influenced by restrictions on movement in the foreign worker dormitories.

In the service sector, airlines and tourism-related sectors such as air transport and accommodation continue to experience significant contractions, as global travel restrictions and sluggish travel demand have brought air travel and visitor arrivals to a halt.

The service industry contracted by 8 percent (yoy) in the third quarter, extending the 13.6 percent decline in the previous quarter.