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Economic impact of coronavirus and Covid-19 already worse than Sars, says Singapore PM
- ‘Our economy will take a hit,’ warns Lee Hsien Loong as he says it’s too early to predict a recession, but one is possible
- The travel industry has been hit particularly hard, with the city state projecting a loss of 18,000 to 20,000 visitors daily
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The coronavirus outbreak is “intense” and its impact is already much greater than that of severe acute respiratory syndrome (Sars) in 2003, Singapore’s Prime Minister Lee Hsien Loong has said.
In a visit to Changi Airport on Friday, Lee said it was too early to tell whether the city state would have a recession, but that it was possible. “Our economy will take a hit,” said Lee.
The coronavirus would have a significant impact on the next couple of quarters, he said, because regional economies were more interlinked than in 2003 and China’s role in the region was much greater.
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Singapore’s first case of Sars was detected in March 2003 and the outbreak peaked at 238 infections and 33 deaths. Consequently, the Singapore economy registered a drop of 4 percentage points in GDP in the second quarter of that year. But the outbreak was contained by May 2003 and in the third quarter GDP climbed by 5.6 percentage points. The country eventually reported a full-year expansion of 4.5 per cent for 2003, higher than the 3.9 per cent of the previous year.
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However, economists have already downgraded Singapore’s GDP forecast for 2020. DBS Bank has cut its forecast from 1.4 per cent to 0.9 per cent; brokerage Maybank Kim Eng from 1.8 per cent to 1.1 per cent; and OCBC widened its forecast to between 0 and 2 per cent growth, as opposed to between 1 and 2 per cent.
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