Singapore economy set for smaller Q4 decline

Safe distancing ambassadors in Singapore remind people to adhere to measures put in place to stem the spread of the coronavirus. These measures include the wearing of masks, restrictions on group sizes, and keeping a 1m distance between groups. ST PH
Safe distancing ambassadors in Singapore remind people to adhere to measures put in place to stem the spread of the coronavirus. These measures include the wearing of masks, restrictions on group sizes, and keeping a 1m distance between groups. ST PHOTO: ARIFFIN JAMAR

Singapore's economic contraction is expected to have moderated in the fourth quarter, as the city state lifted more coronavirus-related curbs due to a drop in local infections.

Gross domestic product (GDP) is seen falling 4.5 per cent from the same period a year earlier, according to the median forecast of economists in a Reuters poll, marking the fourth straight quarter of decline. The economy had shrunk 5.8 per cent in the third quarter.

The South-east Asian trade and travel hub has been hit hard by local virus-related restrictions, border closures around the world and the sluggish global economy.

Singapore's economy is likely to have contracted between 6 per cent and 6.5 per cent last year, marking its worst recession, and grow 4 per cent to 6 per cent this year, according to official forecasts.

The city state began its Covid-19 vaccination programme on Wednesday, and has progressively been easing social distancing curbs as local cases dwindle, even though borders remain largely shut.

"(There is) some slight improvement in Q4 momentum due to the pickup in domestic economic activities, including F&B (food and beverage) and retail during the festive holidays, with Singaporeans unable to travel," said Ms Selena Ling, OCBC Bank's head of treasury research and strategy.

The Government has spent about $100 billion, or 20 per cent of its GDP, in virus-related relief to support households and businesses. The central bank left monetary policy unchanged at its last meeting in October and said its accommodative stance would remain appropriate for some time.

REUTERS

A version of this article appeared in the print edition of The Straits Times on January 01, 2021, with the headline 'Singapore economy set for smaller Q4 decline'. Subscribe