The city-state is now almost Corona-free and the manufacturing industry in particular is growing strongly. Still, it will take Singapore until early 2022 to return to its previous level.
Dhe Asian financial and logistics hub Singapore is recovering from the corona crisis faster than previously feared. However, the city-state has gone through the worst crisis in its history in the past few years, shrinking currently at an estimated 5.8 percent. Analysts had expected economic output to melt by 6.5 percent compared to 2019. In that year Singapore had grown by 0.7 percent.
In the second quarter of last year, Singapore slipped into recession due to Corona; especially the unforeseen rate of infection among the hundreds of thousands of barracked guest workers drove the tropical island into a crisis. Singapore reacted decisively and is now almost Corona-free. The equatorial state was one of the first countries in Asia to start vaccinating its citizens last week. At the same time, the rich trading location tries to establish open connections with as many countries as possible.
In the fourth quarter, the economy only shrank by 3.8 percent year-on-year. The manufacturing industry even increased by an unexpected 9.5 percent year-on-year in the past three months, driven primarily by medical goods, electronics and precision mechanics. However, the construction and services sectors remained 29 percent below the figure for the same quarter of the previous year.
In the third quarter of last year, of course, the minus was still 49 percent. “With vaccinations around the world and in Singapore – despite the mutations in the virus – and thanks to the third phase of easing in Singapore, we expect growth to stabilize between 4 and 6 percent this year,” said Chua Hak Bin, analyst of Maybank in Singapore on Monday. “The recovery will be more U-shaped than V-shaped, and will only reach the level of the pre-Corona period in the first quarter of 2022,” adds Selena Ling from OCBC.