Singapore flags recession as economy shrinks sharply in Q1 due to virus

Singapore's economy shrank 2.2% in the first quarter from a year earlier, preliminary data showed on Thursday, its biggest contraction in over a decade as the coronavirus outbreak prompted the city-state to plan for a recession. The grim data is likely to add to fears that the global economy will contract in the first half of the year. Singapore is one of the world's most open economies and one of the first to report quarterly growth data since the virus spread from China at the start of the year.

The drop was biggest drop since the 2009 financial crisis and was below economists' expectations in a Reuters poll for a 1.5% drop. It also came as authorities downgraded their 2020 forecast for gross domestic product (GDP) to a range of -4% to -1%, from a previous range of -0.5% to 1.5%.

On a quarter-on-quarter basis, GDP contracted 10.6%, the Ministry of Trade and Industry said in a statement, the sharpest drop since the third quarter of 2010 and well below economists' expectations for a 6.3% contraction. "The COVID-19 outbreak has escalated, and led to a significant deterioration in the economic situation both externally and domestically," the trade ministry said in a statement.