Trade-reliant Singapore is typically among the first countries to be hit during global crises because of its small and open economy (Roslan RAHMAN)

Singapore (AFP) – Singapore’s economy, a bellwether for trade-reliant Asian countries, suffered its worst contraction since the global financial crisis in the first quarter as the coronavirus pandemic escalated, official data showed Thursday.

The trading hub’s GDP shrank 2.2 percent year-on-year in the first quarter, according to advance estimates by the trade ministry. Compared with the previous quarter, GDP fell by 10.6 percent.

Lockdowns and other measures to contain the spread of the virus imposed by governments worldwide are battering the global economy, which many analysts now expect to fall into a deep, long recession.

The city-state, a travel hub and financial centre, is typically among the first countries to be hit during global crises because of its small and open economy, with ripples then spreading across the region.

The first quarter data was the worst quarterly contraction since 2009 during the global financial crisis, which was the last time the economy fell into recession.

The ministry also further lowered its GDP forecast for this year and said it expects the economy to shrink between 1.0 and 4.0 percent.

“As the global COVID-19 situation is still evolving rapidly, there remains a significant degree of uncertainty over the severity and duration of the global outbreak, and the trajectory of the global economic recovery once the outbreak has been contained,” the ministry said in a statement.

“The balance of risks, however, is tilted to the downside.”

Singapore normally gives advance estimates even before the quarter ends to gauge performance, making it one of the first economies in the region to give an indication of the impact.

However they do not cover the full period, meaning the revised figure — which will be released later — may be even worse.

Like many other places, Singapore has taken steps to contain the pandemic, including banning all foreign arrivals. The city-state has reported 631 virus cases, including two deaths. 

Before the virus, Singapore’s economy was already being hammered by the US-China trade war.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.