How severe do you think the impacts will be as well?
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William Seah
07 Apr 2020
Financial services consultant at Pias
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Clara Ng
07 Apr 2020
Community Manager at Seedly
Hi ShinningSheen,
Quoting IMF chief Kristalina Georgieva, she said “it is clear that we have entered a recession” and that the COVID-19 pandemic has driven the global economy into a downturn.
Here in Singapore, we are not in a recession yet but it seems to be a matter of time.
OCBC expects Singapore’s economy to contract by 0.5% this year, which is lower than the previously forecast figure of 0.3% growth. OCBC’s head of treasury research and strategy, Selena Ling, has also forecasted that growth in Q1 could shrink by 1.1% over the same period last year and plunge 8.7% compared with Q4 2019. Other banks like DBS and Standard Chartered have already predicted a recession for Singapore in 2020.
COVID-19 has disrupted the operations of businesses and as businesses lose money as a result, they try to cut costs and that could result in retrenchment. When workers lose their jobs, consumers will have less money to spend and will consume less, which will affect revenue inflow for businesses, and the cycle continues.
As our economy relies heavily on trade, heavy restrictions on trade, investments, consumption and travel imposed by countries worldwide due to COVID-19 will hurt our economy.
Conclusion: Given the global economic slowdown, heightened social distancing measures and stringent travel lockdowns, it seems likely that Singapore will enter recession this year. The support from the Government has been very generous and helpful but it might not be sufficient to ward off an impending recession.
It is uncertain when the bottom of the downturn will be given that COVID-19 is still ongoing and continues to spread. It will take a much longer time for us to recover as it is the first time ever the world economy has entered a standstill. That being said, we are more prepared this time than we were back in 2008 during the Global Financial Crisis. Nevertheless, we have to be prepared when the impacts from COVID-19 is far worse than the impacts from 2008 Global Financial Crisis or any other financial crisis we’ve experienced.
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By definition a recession is two quarters of negative economic growth. So no we are not in recession yet.
i do believe we will be in a recession; but for how long will depend on how fast the world can get it's act together.