Singapore lowers growth forecast as tourism, trade hit

SINGAPORE: Singapore cut its economic growth forecast for this year yesterday as the coronavirus batters tourist arrivals and trade.

The city-state is one of the worst affected places outside China, with 75 cases of the virus so far. China has more than 70,000 infections.

Singapore downgraded its 2020 growth estimate to a range of -0.5% to 1.5%. That compares with its previous forecast in November of 0.5% to 2.5%.

“The outbreak of the coronavirus ... has affected China, Singapore and many countries around the world,” the trade ministry said.

“In Asia, the outbreak is likely to dampen the growth prospects of China and other affected countries this year.”

Tourism arrivals have already started to decline, exports are expected to take a hit, and domestic consumption is likely to fall as people cut back on shopping and dining out, it added.

China is Singapore’s largest source of tourists and a major export destination.

The city-state was at risk of sliding into a technical recession, warned Song Seng Wun of CIMB Private Banking.

“There is a real possibility of two quarters of contraction or even two quarters of year-on-year decline,” he said.

“Mathematically it’s possible because of the integrated nature of the global supply chain and the impact of the slowdown in China that could have far-reaching implications on small tradeoriented economies like Singapore.”

“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. – AFP, Reuters