The contraction was the biggest since the 2009 financial crisis and was below economists’ expectations for a 1.5 per cent decline. On a quarterly basis, gross domestic product (GDP) shrank 10.6 per cent, the lowest since 2010 and below expectations for a 6.3 per cent decline.
The data prompted the trade ministry to cut its 2020 GDP forecast range to -4 per cent to -1 per cent, from a previous range of -0.5 per cent to 1.5 per cent.
More than three-quarters of economists polled by Reuters last week believed the global economy is already in recession as the virus continues to spread, ending the longest expansion on record.
Highlighting the suddenness and severity of the shock, separate data on Thursday showed Singapore’s industrial output plunged 22.3 per cent in February from the previous month – the biggest contraction in official records going back to 1983, and far more than a forecast 11.5 per cent fall.
Aside from the fiscal support, economists are betting on drastic monetary easing from the central bank which has brought forward its semi-annual monetary policy statement to Monday, March 30.
Singapore has been battling the virus outbreak which has killed more than 21,000 people globally since mid-January. It has seen a surge in mainly-imported infections in recent days, prompting it to order the closure of bars, discos, and cinemas and limit gatherings.
On Wednesday, it recorded its biggest daily jump in cases, bringing its total to 631 with two deaths.
“Singapore’s growth estimate is like the canary in the mineshaft and warns of further economic pain to come for other Asian economies as well,” analysts at OCBC said.