Singapore’s GDP contracted by 5.8 per cent in 2020 – MTI’s advance estimates

Singapore’s GDP contracted by 5.8 per cent in 2020 – MTI’s advance estimates

SINGAPORE: The Singapore economy contracted by 5.8 per cent for the whole of 2020, according to the advance estimates released by the republic’s Ministry of Trade and Industry (MTI) today.

On Nov 23, the MTI announced that Singapore’s gross domestic product (GDP) growth is expected to come in at “-6.5 to -6.0 per cent” in 2020 and “+4.0 to +6.0 per cent” in 2021.

In a statement here, the MTI said the republic’s economy contracted by 3.8 per cent on a year-on-year basis for the fourth quarter of 2020, an improvement from the 5.6 per cent contraction in the third quarter.

On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 2.1 per cent, following the 9.5 per cent expansion in the third quarter, it said.

The MTI said the strong GDP growth seen in the third quarter was due to the phased resumption of activities following the eight-week Circuit Breaker that was implemented from April 7.

The rebound in activity in major economies during the quarter as they emerged from their lockdowns was also another contributing factor.

The advance estimates were computed largely from data in the first two months of the quarter, October and November. 

On sectoral performance, the MTI said the manufacturing sector expanded by 9.5 per cent on a year-on-year basis in the fourth quarter, extending the 10.8 per cent growth in the previous quarter.

“Growth of the sector was supported primarily by output expansions in the electronics, biomedical manufacturing, and precision engineering clusters, which outweighed output declines in the transport engineering and general manufacturing clusters,” it said.

However, the construction sector shrank by 28.5 per cent on a year-on-year basis in the fourth quarter, improving from the 46.2 per cent contraction in the preceding quarter.

“The improved performance of the sector came on the back of the resumption of more construction activities in the fourth quarter compared to the previous quarter,” said the ministry.

Among the services sectors, the MTI said the wholesale & retail trade and transportation & storage sectors shrank by 11.0 per cent in the fourth quarter, moderating slightly from the 11.9 per cent contraction in the previous quarter.

The performance of this group of sectors was primarily weighed down by the trade-related segments such as wholesale trade and water transport, which contracted due to sluggish external demand as major economies around the world continued to grapple with the COVID-19 pandemic.

Another trade-related segment, the air transport segment, shrank on the back of ongoing global travel restrictions and weak travel demand, it said.

Meanwhile, the information & communications, finance & insurance, and professional services sectors collectively grew by 0.2 per cent, a reversal from the 0.2 per cent contraction in the third quarter.

The remaining group of services sectors — accommodation & food services, real estate, administrative & support services, and other services industries — contracted by 9.9 per cent, an improvement from the 13.5 per cent contraction in the third quarter.

Within the group, the accommodation segment continued to shrink as a result of weak tourism demand.

The performance of the food services segment and other services industries — arts, entertainment & recreation and “others” segments was weighed down by constraints arising from the implementation of safe management measures, it said.

The MTI will release the preliminary GDP estimates for the fourth quarter and the whole of 2020, including performance by sectors, sources of growth, inflation, employment and productivity, in its Economic Survey of Singapore in February 2021.

— BERNAMA