Singapore sees third straight quarterly GDP contraction, but signs point to recovery

Singapore’s economy contracted 7.0 per cent year on year in the third quarter, but grew 7.9 per cent on a quarterly, seasonally adjusted basis

Analysts predict the city state is only likely to see positive economic growth next year, due to the coronavirus pandemic

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The Kampong Glam area of Singapore. The country’s economy could be showing signs of life, with third-quarter GDP increasing slightly from the second quarter. Photo: Bloomberg

Published: 8:18am, 14 Oct 2020Updated: 8:12pm, 14 Oct 2020

Singapore’s export-focused economy recorded its third consecutive year-on-year decline in the third quarter, the country’s trade ministry said on Wednesday, with the milder contraction in comparison with the first two quarters possibly pointing to the city state’s recovery from the economic fallout caused by the coronavirus pandemic.

Even so, analysts predicted Singapore would likely only see positive economic growth next year, warning that other countries in the region are still grappling with fresh waves of infections and newly implemented lockdowns.

The economy, often seen as a bellwether for the region, contracted 7.0 per cent year on year in the third quarter, the Ministry of Trade and Industry (MTI) said in its estimates, but grew 7.9 per cent on a quarterly, seasonally adjusted basis.

“The improved performance of the Singapore economy in the third quarter came on the back of the phased reopening of the economy following the Circuit Breaker,” said the ministry, referring to its two-month partial lockdown from April to June.

The growth from the second quarter was also attributed to the performance of the country’s manufacturing sector, which grew by 2 per cent in the third quarter on a year on year basis, reversing from the 0.8 per cent contraction in the previous quarter. The sector’s growth was supported by “robust global demand” for semiconductors and semiconductor manufacturing equipment, it said.

Singapore sees third straight quarterly GDP contraction, but signs point to recovery

Singapore’s economy contracted 7.0 per cent year on year in the third quarter, but grew 7.9 per cent on a quarterly, seasonally adjusted basis Analysts predict the city state is only likely to see positive economic growth next year, due to the coronavirus pandemic

Singapore’s economy contracted 7.0 per cent year on year in the third quarter, but grew 7.9 per cent on a quarterly, seasonally adjusted basis

Analysts predict the city state is only likely to see positive economic growth next year, due to the coronavirus pandemic