Singapore yesterday cut its economic growth forecast for this year as the COVID-19 outbreak batters tourist arrivals and trade.
The city-state is one of the worst affected places outside China, with 75 cases of the disease so far. China has more than 70,000 infections.
Singapore downgraded its growth estimate to a range of minus-0.5 percent to 1.5 percent.
That compares with its previous forecast in November last year of 0.5 percent to 2.5 percent.
“The outbreak of the coronavirus ... has affected China, Singapore and many countries around the world,” the Singaporean Ministry of Trade and Industry said in a statement. “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, CIMB Private Banking economist Song Seng Wun (宋城煥) said.
“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, trade-oriented economies like Singapore.”
Separately yesterday, Thailand lowered its growth outlook for this year as its tourism-reliant economy takes a knock from the outbreak.
Growth is seen in a range of 1.5 to 2.5 percent this year, down from a previous projection of 2.7 to 3.7 percent, the Thai National Economic and Social Development Council said.
GDP grew 2.4 percent last year, the slowest pace in five years.
The economy was already under strain before the disease began spreading early this year, with growth weighed down by budget delays, drought and a relatively strong currency.
GDP rose 1.6 percent annually in the fourth quarter of last year, lower than the 1.9 percent median estimate in a Bloomberg survey and down from a revised 2.6 percent in the third quarter.
First-quarter economic growth should be significantly affected by the outbreak and improve in the second quarter, Council Secretary-General Thosaporn Sirisumphand said in a briefing in Bangkok.
Additional reporting by Bloomberg
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