News: Singapore’s economy contracted 3.8% in Q4, 5.8% in 2020

Jan 5, 2021

On a seasonally-adjusted basis, the economy grew 2.1%, after expanding 9.5% in Q3 2020.

The Singapore economy shrank 3.8% year-on-year in the fourth quarter of 2020, an improvement from Q3 2020’s 5.6% contraction, showed advance estimates by the Ministry of Trade and Industry (MTI).

On a seasonally-adjusted basis, the economy grew 2.1%, after expanding 9.5% in Q3 2020.

For the whole of 2020, the economy contracted 5.8%.

MTI revealed that the manufacturing sector expanded 9.5% in Q4 2020 and 7.1% for the whole year.

“Growth of the sector was supported primarily by output expansions in the electronics, biomedical manufacturing and precision engineering clusters, which outweighed output declines in the transport engineering and general manufacturing clusters,” it said. 

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On a quarter-on-quarter seasonally-adjusted basis, however, the sector contracted 2.6%, reversing the 12.6% growth in the previous quarter.

The construction sector contracted 28.5% in Q4 2020, moderating from the 46.2% contraction posted in the previous quarter. For the entire 2020, the sector shrank 33.7%.

On a quarter-on-quarter seasonally-adjusted basis, the sector grew 34.4% in Q4 2020, extending the 39% growth in Q3 2020.

MTI attributed the improved performance of the construction sector in Q4 2020 to the resumption of more construction activities during the quarter.

The services sector, on the other hand, posted mixed result with the wholesale & retail trade and transportation & storage contracting 11% during the fourth quarter, while the information and communications, finance and insurance and professional services sectors collectively expanded by 0.2%. 

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“The remaining group of services sectors (i.e., accommodation & food services, real estate, administrative & support services and other services industries) contracted by 9.9%, an improvement from the 13.5% contraction in the third quarter,” said the ministry. 

“Within the group, the accommodation segment continued to shrink as a result of weak tourism demand, while the performance of the food services segment and other services industries (eg. arts, entertainment & recreation and “others” segments) was weighed down by constraints arising from the implementation of safe management measures,” it added. 

MTI said the sectors within the group grew 4.5% on a quarter-on-quarter seasonally-adjusted basis, easing from the 11.7% growth in Q3 2020.

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