Singapore Partial Lockdown to Cost Economy S$10 Billion
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Singapore’s partial lockdown to contain the spread of the coronavirus could cost the economy about S$10 billion ($7 billion) in lost output, Maybank Kim Eng Research Pte. estimates.
That equates to about 2% of gross domestic product, according to Chua Hak Bin, a senior economist at Maybank in Singapore.
Singapore has banned social gatherings and shut workplaces, except for essential services and key economic sectors, as part of “circuit-breaker” measures to contain virus infections. The restrictions took effect this week and will last through May 4.
Non-essential services make up about a third of total employment, slightly more than their 30% share of GDP, Chua said in an email, with sectors such as retail, food and beverage and construction being more labor-intensive than “essential” businesses such as financial services or electronics manufacturing.
Singapore’s government is forecasting a contraction in the economy of 1%-4% and has committed fiscal support of almost S$60 billion, or 12% of gross domestic product, to help cushion the blow for businesses and households. President Halimah Yacob said Thursday the government has been given approval to draw S$21 billion from past reserves to help fund part of the stimulus.
On Wednesday, a day after the partial lockdown began, the city state reported its highest daily increase in virus cases of 142, bringing the country’s total to 1,623. There’s been a spike in cases at tightly packed dormitories housing thousands of low-wage foreign workers, prompting the government to impose quarantine measures to contain the outbreak.
Chua warned that border controls and quarantine measures may remain in place for a while, even if the Covid-19 cases come under control. These steps, while necessary, can impede the movement of labor and thus “Singapore’s capacity to capitalize on any recovery in the aftermath,” he said.
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