SINGAPORE- Singapore’s economic contraction is expected to have moderated in the fourth quarter, as the city-state lifted more coronavirus-related curbs due to a drop in local infections.
Gross domestic product (GDP) is seen falling 4.5 percent from the same period a year earlier, according to the median forecast of economists in a Reuters poll, marking the fourth straight quarter of decline. The economy had shrunk 5.8 percent in the third quarter.
The Southeast Asian trade and travel hub has been hit hard by local virus-related restrictions, border closures around the world and the sluggish global economy.
Singapore’s economy is likely to contract between 6 percent and 6.5 percent this year, marking its worst recession, and grow 4 percent to 6 percent in 2021, according to official forecasts.
The city-state began its COVID-19 vaccination program on Wednesday, and has progressively been easing social distancing curbs as local cases dwindle, even though borders remain largely shut.
“(There is) some slight improvement in 4Q momentum due to the pickup in domestic economic activities, including F&B (food and beverage) and retail during the festive holidays with Singaporeans unable to travel,” said Selena Ling, OCBC Bank’s head of treasury research and strategy.
The government has spent about S$100 billion ($75.64 billion) or 20 percent of its GDP, in virus-related relief to support households and businesses. The central bank left monetary policy unchanged at its last meeting in October and said its accommodative stance would remain appropriate for some time.
