Singapore’s 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.
The Ministry of Trade and Industry (MTI) made the announcement on 23 November 2020 at a virtual press briefing on the Economic Survey of Singapore.
For the third quarter, the Singapore economy expanded by 9.2 per cent on a quarter-on-quarter seasonally adjusted basis. This was an improvement from the 13.2 per cent contraction in the second quarter when the circuit breaker was implemented from 7 April–1 June 2020.
On a year-on-year basis, the economy contracted by 5.8 per cent, moderating from the 13.3 per cent contraction recorded in the previous quarter.
This improved performance came on the back of phased resumption of activities in the third quarter, as well as the rebound in activity in major economies during the quarter as they emerged from their lockdowns.
Minister for Trade and Industry Chan Chun Sing commented: “While things have improved from August 2020, where we posted our worst quarterly performance on record, there is still much work to be done.”
Gradual Growth in the Year Ahead
For 2021, the major advanced and developing economies are expected to recover from the massive economic disruptions caused by COVID-19 and see a rebound in their GDP.
However, the road to recovery is expected to be slow and uneven across economies around the world, including Singapore.
Trade and Industry Permanent Secretary Gabriel Lim said: “While growth is expected to rebound from the low base this year, our economic recovery is expected to be gradual, with GDP not likely to return to pre-COVID levels until the end of 2021.
“Furthermore, there remains uncertainty over how the COVID-19 situation will evolve globally in the year ahead, which will depend in part on the progress in vaccine development, production and distribution.”
Factors Impacting Economic Recovery
In his remarks to media, Mr Chan outlined four factors that will affect the rate of economic recovery both domestic and global.
He mentioned that two of these factors are within Singapore’s control – infection rates and the ability of businesses and workers to adapt to the realities of a new COVID world.
The remaining two factors, on the other hand, are outside Singapore’s control – the geopolitical dynamics between big countries such as US and China and the recurring waves of infection happening globally.
Mr Chan said: “So long as we manage the controllable factors well, and mitigate the risks of those beyond our control, I believe we can recover more quickly.
“If we are able to help our businesses and workers make the necessary adjustments and pivot quickly, I have every reason to believe that we will emerge in a stronger position than before.”
*The Economic Survey of Singapore includes information and data on the overall GDP performance of the economy, sectoral performance, sources of growth, inflation, employment and productivity in the third quarter of 2020. Read more about it here.
