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Singapore further downgrades GDP growth forecast on virus pandemic

This photo taken from Malaysia's Johor Bahru shows almost empty roads near the border with Singapore on March 18, 2020, after Malaysia imposed a two-week nationwide lockdown to curb the spread of the new coronavirus. (Kyodo)

SINGAPORE (Kyodo) -- Singapore on Thursday further downgraded its growth forecast for 2020 due to the coronavirus pandemic, projecting 1 percent to 4 percent contraction in Southeast Asia's most advanced economy.

    The Ministry of Trade and Industry in February lowered its gross domestic product growth forecast for the year to minus 0.5 percent to 1.5 percent due to the outbreak of COVID-19, the illness caused by the new virus.

    The ministry, in a statement on Thursday, cited a "significant deterioration in the economic situation both externally and domestically."

    It also cited the risk of "a more protracted-than-expected global outbreak, more severe and prolonged disruptions to global supply chains and the possibility of financial shocks triggered by the economic impact of COVID-19."

    The last time the Singapore economy went into negative growth was in 2001 when GDP fell by 1.1 percent.

    In the first quarter of this year, the economy contracted by 2.2 percent year on year, in a reversal from the 1 percent growth in the preceding quarter, according to the ministry.

    On a quarter-on-quarter basis, the economy shrank by an annualized 10.6 percent, a sharp pullback from the 0.6 percent growth in the previous quarter.

    The construction sector was hit by supply-chain disruptions and delays in the return of foreign workers as a result of the lockdowns and travel restrictions imposed by other countries.

    Singapore has tightened its borders significantly since February to reduce the number of imported COVID-19 cases, with all short-term visitors now banned from entering or transiting, leading to a sharp fall in tourist arrivals.

    The city-state has also ordered the cancellation of all events and mass gatherings.

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