Singapore cuts 2020 GDP outlook again as virus batters economy

ECONOMIC GROWTH - SINGAPORE. Singapore downgraded its 2020 gross domestic product forecast for the third time on Tuesday, the trade ministry said, as the bellwether economy braces for its deepest ever recession.

The city-state lowered its GDP forecast to a contraction range of -7% to -4% from the prior range of -1% to -4%.

Singapore's economy shrank 0.7% year-on-year in the first quarter and 4.7% on a quarter-on-quarter, a less severe decline than advance estimates, although officials and analysts warned of more pain ahead.

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"There continues to be a significant degree of uncertainty over the length and severity of the COVID-19 outbreak, as well as the trajectory of the economic recovery," said Gabriel Lim, permanent secretary at the ministry of trade and industry.

Following the news, central bank chief economist Ed Robinson said monetary policy remains unchanged and will next be reviewed in October, as planned.

Singapore also downgraded its 2020 forecast for non-oil domestic exports to -4.0% to -1.0%, from -0.5% to 1.5% previously.

Exports have been a rare bright spot for the economy in recent months mainly due to a surge in demand for pharmaceuticals.

That demand was also seen in factory data on Tuesday with industrial output increasing 13% in April on a year-on-year basis, as pharmaceuticals production more than doubled.