(Bloomberg) -- Singapore is bracing for a sharper economic contraction this year than an earlier forecast of as much as a 4% slump, as the coronavirus pandemic continues to spread globally and disrupts supply chains.
The city-state is “very likely” to see a sharper fall in GDP, the city-state’s trade and industry minister Chan Chun Sing said Thursday in an interview with Bloomberg Television’s Haslinda Amin. “We are really concerned that worldwide, this is going to lead to a more serious problem than many had anticipated just a month ago”.
The minister refrained from giving a new official forecast for GDP, but noted that connectivity among the major economies has been unsettled, hurting the short-term capacities and long term capabilities of countries. The country’s gross domestic product contracted an annualized 10.6% in the first quarter -- most in a decade -- with the government in March forecasting a contraction of 1%-4% for the year.
Singapore on Tuesday extended its “circuit-breaker” measures for a further four weeks until June 1 in a bid to “decisively” bring down coronavirus cases within the community. Chan said he hopes to ‘progressively open’ the economy in a month’s time and said the country is planning ‘much more testing’ for the entire population.
Initially seen as a global model for how to contain the pandemic, Singapore now has the most cases in Southeast Asia -- more than 10,000 -- as Covid-19 spreads quickly in densely packed dormitories housing foreign laborers.
READ: How Singapore Flipped From Virus Hero to Cautionary Tale
The government has committed more than S$60 billion ($42 billion) in fiscal support and the Monetary Authority of Singapore has undertaken unprecedented easing steps to cushion the blow for businesses and households.
Citigroup Inc (NYSE:C). economists warned that Singapore will witness a deeper recession because of the extended circuit breaker, with the economy now seen contracting 8.5% for the year.
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