By Lee Kah Whye
Singapore, July 20 (ANI): The Singapore Ministry of Trade and Industry recently released advanced estimates of the city-state's GDP numbers for the second quarter of 2020. The data confirmed the brutal impact of the COVID-19 pandemic on the economy.
On a seasonally adjusted annualised basis, quarter-on-quarter GDP was down some 41.2 per cent compared with the same quarter a year ago. It is significantly worse than economists' expectation of a 37.4 per cent contraction.
In the second quarter covering the April 7 to June 1 period, Singapore was on a lockdown to prevent the spread of the virus resulting in economic activity going into hibernation with workplaces closed except for essential services.
Singapore's advance GDP estimates are intended as an early indication of the GDP growth in the quarter and are computed based on data from the first two months of the quarter. Adjustments will be made when comprehensive data becomes available but historically, the advance estimates have been reasonably accurate.
Singapore's economy is trade-dependent and the severe decline in global consumption and trade is reflected in how its economy has performed. As the first Asian country to report its GDP numbers for the second quarter of this year, this may give a hint of the devastating effect the COVID-19 pandemic may have had on similar economies in the rest of Asia.
Due to the worsening health crisis, the International Monetary Fund warned last month of a steeper contraction in global economic activity than it had earlier forecasted. In its revised estimate, world output is expected to weaken by 4.9 per cent, compared with a 3.0 per cent contraction it had predicted in April.
On a quarterly basis, Singapore's overall GDP fell 12.6 per cent compared within the same period a year ago with manufacturing being the bright spark boosted by strong growth in the biomedical sector. The manufacturing industry output rose 2.5 per cent in the second quarter, but it was still lower than the 8.2 percent rise in the earlier quarter. On a quarter-on-quarter seasonally adjusted annualised basis, the manufacturing sector shrank 23.1 per cent, a sharp reversal from the 45.5 percent growth in the preceding quarter.
Apart from biomedical manufacturing, the economy in the wealthy island republic shrank across all sectors including chemicals, transport, engineering, and other manufacturing clusters. Construction, where the virus has been rampaging through dormitories most workers are housed, saw the steepest plunge in activity with a staggering 95.7 percent fall on a quarter-on-quarter annualised basis. This translate to a deterioration of 54.7 percent when compared with Q1.
The once-in-a-lifetime pandemic has so far infected over 14 million people worldwide and claimed more than 600,000 lives globally as at the end of last week. Singapore has reported nearly 48,000 cases with about 95 percent of the cases impacting migrant workers, and a total of 27 fatalities as a direct result of the virus.
The services sector contracted 13.6 percent for the quarter on a year-on-year basis with related industries like retail, food and beverage (F&B), hospitality, and air transport the most gravely affected.
Among those particularly badly battered by the pandemic are small and medium sized Indian businesses in Singapore especially those in the retail, tourism and the F&B industries.
A task force was set-up by the Singapore Indian Chamber of Commerce and Industry (SICCI) to help them. It is chaired by prominent lawyer Chandra Mohan Rethnam who is a partner at one of the best-known law firms in Singapore.
Among the first things the SICCI has done is to tie up with Enterprise Singapore to set up the SG Together Enhancing Enterprise Resilience (STEER) Programme whose objective is to help businesses tide over the challenges arising from COVID-19.
Enterprise Singapore is the government agency championing enterprise development especially among SMEs (Small and Medium sized Enterprises) helping them upgrade their capabilities, innovate, transform, and internationalise. It also supports the growth of Singapore as a trading hub.
As reported by Connected To India, the SICCI task force went about providing support to Indian SMEs to access various Singapore government funding and support packages for small businesses. They set-up a call centre and trained a group of people to be familiar with the various government schemes so that they can provide advise to SMEs who were unclear about how best to go about getting help.
As business slowed to a trickle and with cashflow and financial management topmost in the minds of these SMEs, the task force tied up with major banks and financial institutions to provide direct and dedicated teams to provide financial support with special interest rates, rebates and fee waivers for SICCI members and Indian businesses that needed help.
Recognising that the lull in business activity offers an excellent opportunity to upgrade skills and knowledge, the SICCI is collaborating with Skillsfuture Singapore to curate a full range of relevant training courses using government grants for members and for Indian businesses so that once business resumes, they will be in a better position, with better qualified workers, to grow their businesses.
During this period, with social distancing at the fore, and where online shopping and food deliveries are the key to survival, digital competencies are critical for these small businesses who need help to go online. To enable this, the SICCI is reaching out to Singapore Infocomm Media Development Authority (IMDA) to help Indian SMEs digitise their businesses using the many grants the Singapore government have made available to SMEs who digitalise and adopt e-payment and e-commerce systems. (ANI)
By Lee Kah Whye