Singapore cuts 2020 GDP forecast due to virus

Pedestrians wearing protective masks walk past the Marina Bay Financial Centre in Singapore, on Wednesday, Feb. 12, 2020. Photographer: Ore Huiying/Bloomberg

SINGAPORE: Singapore on Monday downgraded its 2020 economic growth forecast as it braces for a hit from the novel coronavirus outbreak, opening up the possibility of a recession this year.

The revision came as the trade ministry reported final fourth-quarter GDP data that was slightly higher than advance estimates, but also downgraded its 2020 exports forecast.

Its forecast 2020 GDP growth range is now -0.5%-1.5%, from 0.5%-2.5% previously. The non-oil domestic exports range was lowered to -0.5%-1.5% from 0%-2% previously.

"The outlook for the Singapore economy has weakened since the last review... In particular, the COVID-19 outbreak is expected to affect the Singapore economy," said the ministry's permanent secretary, Gabriel Lim, adding that the impact would be mostly felt in manufacturing and wholesale trade, tourism and transport as well as retail and food services.

Singapore's prime minister Lee Hsien Loong also said on Friday that a recession was a possibility.

Gross domestic product (GDP) rose 1% year-on-year in the fourth quarter, the ministry of trade and industry said, faster than the 0.8% growth seen in the government's advance estimate.

Singapore's economy grew 0.6% in October-December from the previous three months on an annualised and seasonally adjusted basis, compared with the government's initial estimate of a 0.1% expansion.

The city-state's economy was seen staging a nascent recovery this year after recording its lowest growth rate in a decade in 2019 at 0.7%, before the virus outbreak spread to the city-state in late January.

The Southeast Asian business and travel hub is set to roll out a hefty package of measures to cushion the blow from the epidemic on its economy on Tuesday, with some analysts expecting it to budget for its biggest deficit in over a decade. - Reuters