Singapore’s economy contracted 5.8 percent in 2020, according to statistics from the Singapore Ministry of Trade and Industry.
Singapore implemented stringent lockdown measures last April in response to the COVID-19 pandemic but began lifting them in June. As a result, the nation’s gross domestic product grew by 9.5 percent in the third quarter of 2020, but expanded by only 2.1 percent in the fourth quarter.
For the fourth quarter, Singapore’s economy contracted 3.8 percent compared to the previous year. Manufacturing saw year-over-year growth of 9.5 percent while goods-producing industries saw slower growth of 3.3 percent. Growth for the construction industry, meanwhile, plunged 28.5 percent.
The services sector contracted 6.8 percent in the fourth quarter, including an 11 percent contraction in retail trade and a 9.9 percent contraction in other services, such as food, accommodations and real estate. This is due in large part to the "ongoing global travel restrictions and weak travel demand," the release noted, as well as continued social distancing and other safety restrictions put in place to combat the spread of the coronavirus.
However, the country is faring better than the government's prior forecast of a decline of 6 to 6.5 percent, according to CNBC. MTI's data shows the services industry growing 2.4 percent quarter-on-quarter, and construction expanding 34.4 percent.
The MTI will release updated figures in February, according to the release.
Meanwhile, the payments sector has had its own issues to contend with in Singapore.
In October, Singapore’s government ordered the closure of Wirecard’s payment processing services.
Singapore businesses were struggling to get paid following the shutdown of German payment processing firm Wirecard, according to a report in the Financial Times. Since the shutdown, Singapore businesses have pushed to process payments for such things as telephone bills and restaurant meals.
The Monetary Authority of Singapore (MAS) ordered the Wirecard closure in September after the German FinTech filed for insolvency in June. It also directed Wirecard to return customers’ funds by Oct. 14.
The downfall of Wirecard followed a scandal involving roughly $2.1 billion missing from its accounts.
Singapore’s economic slowdown follows that of China, which has also been hard hit by the ongoing pandemic.
