Singapore Marina Bay

Total retrenchments are also expected to hit 24,500 this year. 

DBS Bank expects a 0.5% drop in Singapore’s economy this year, instead of the 0.9% growth forecasted last month, reported The New Paper.

DBS Bank Economist Irvin Seah explained that the downgraded forecast might come with further downside risks, should the coronavirus outbreak worsen.

He also said that total retrenchments are expected to hit 24,500 this year, which will be a little above the 23,430 recorded during the global financial crisis in 2009.

“Considering the chaotic situation in many parts of the world and the economic costs of those restrictive measures on trade, investment, consumption and travel, this is evolving into a ‘self-induced’ global recession.

“Being a small and open economy, Singapore will not be spared,” Seah warned.

He said a second stimulus package of up to $14 billion to $16 billion could be rolled out, funded by the remaining budget surplus for this term of government of about $7.7 billion, as well as an additional $6 billion to $8 billion from the reserves.

However, Seah also expects the Monetary Authority of Singapore to respond by potentially allowing the currency to weaken amid the risk to growth.

Singapore has also broadened its travel restrictions beyond China to include markets that accounted for about 69% of Singapore’s total tourist arrivals last year.

Thus, he expects a significant hit to tourism-related services and a weaker global demand for Singapore’s exports and the manufacturing sector too. 

Read: Singaporeans are still optimistic with the current real estate climate, according to PropertyGuru’s study

Meanwhile, Maybank Kim Eng Senior Economist Chua Hak Bin said Singapore’s economy had already been dealt a huge blow due to the fall in demand and tourism, as well as supply chain disruption from China.

“That was the first shock. The second shock was the spread of the disease to Europe and the US, which are large consumer markets for Singapore,” he said.

“The third shock is the spike in cases in Asean which is forcing some of our neighbours to impose partial lockdowns… If two of our closest neighbours are taking draconian measures that will affect their economies, ours will be affected as well.”

Some economists, however, still expect the economy to grow over the year, at least for now.

For instance, Khoon Goh, Head of Asia Research at ANZ in Singapore, said that the bank revised its calculation for GDP growth this year and anticipates it to contract by 0.6%.

OCBC Bank Chief Economist Selena Ling disclosed that the bank’s latest expectation for Singapore’s full-year GDP growth stands at 0.3%.

Lastly, United Overseas Bank, maintains its growth forecast for this year at 0.5% despite further downside risks, according to the bank’s economist Barnabas Gan.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email