Singapore upgrades third-quarter GDP, sees economy returning to growth next year

A view of Singapore's skyline on Nov 17, 2020.
PHOTO: Reuters

Singapore’s economy contracted much less than initially estimated in the third quarter due to gradual easing of Covid-19 lockdown measures and authorities expect the city-state to bounce back to growth next year from its worst recession.

Gross domestic product (GDP) fell 5.8 per cent year-on-year in the third quarter, the ministry of trade and industry said on Monday, versus the 7 per cent drop seen in the government’s advance estimate.

Analysts expected a 5.4 per cent contraction, according to the median of 10 forecasts.

The government said it now expects full-year GDP to contract between 6.5 per cent and 6 per cent versus its prior forecast for a 5 per cent to 7 per cent decline. The country is still facing the biggest downturn in its history.

The economy is expected to grow 4 per cent to 6 per cent next year.

“The recovery of the Singapore economy in the year ahead is expected to be gradual, and will depend to a large extent on how the global economy performs and whether Singapore is able to continue to keep the domestic Covid-19 situation under control,” the MTI said in a statement.

The economy grew 9.2 per cent from the previous three months on a seasonally adjusted basis, compared with the 13.2 per cent contraction in the second quarter. The bounce marked the end of a “technical recession”, as it followed two preceding quarterly contractions.

ALSO READ: Singapore sees third straight quarterly GDP contraction, but signs point to recovery