March 19, 2020 / 3:41 AM / 11 days ago

DBS says Singapore recession inevitable in 2020 due to coronavirus

FILE PHOTO - A view of the empty Woodlands Causeway between Singapore and Malaysia after Malaysia imposed a lockdown on travel due to the coronavirus disease (COVID-19) outbreak March 18, 2020. REUTERS/Edgar Su

SINGAPORE (Reuters) - Singapore’s economy will contract by 0.5% in 2020, the city-state’s biggest bank DBS said on Thursday, adding a recession was inevitable due to an expected hit from the coronavirus outbreak.

DBS’s prior estimate was for the economy to grow 0.9%.

“A recession in Singapore appears inevitable, and we have revised our full year GDP growth forecast for 2020 to -0.5% to reflect the recession scenario,” said DBS economist Irvin Seah.

The government has already signalled a chance of a recession this year and cut its growth forecasts.

The possibility of Singapore edging towards its first full-year recession in nearly two decades is firming the case for the central bank to loosen policy.

Reporting by Aradhana Aravindan and Anshuman Daga in Singapore; Editing by Christian Schmollinger

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