Global economic recession could lead to an increase in the unemployment rate in Singapore, despite all efforts to stop the spread of Covid-19, a report by the DBS Bank states that the unemployment rate in the Asian country could reach almost 50,000 jobs .
In the document written by the bank’s senior economist Irvin Seah, it is detailed that GDP is very likely to decrease by 5.7% and that the services and construction sectors will be the most affected in this global economic recession.
“If Singapore fails to contain the outbreak by the end of the circuit breaker on June 1, GDP could drop as much as 7.8 percent,” Seah said, calling 2020 the “darkest year” for Singapore’s economy since the independence in 1965.
Singapore has seen a rapid increase in patients infected with Covid-19 in recent weeks, which has forced the authorities of this country to take measures such as the suspension of activities, among which the construction sector stands out.
Authorities continue efforts to alleviate the effects of this global economic recession, but a significant number of jobs could still be lost as the economy plunges into an unprecedented deep crisis, Seah said.
He also noted that companies may have to cut more staff to bring labor costs in line with falling earnings, noting that some companies with weaker financial positions could fall.
The closure of nonessential businesses was initially ordered until May 4, however Prime Minister Lee Hsien Loong announced last Tuesday a four-week extension until June 1, as the list of essential businesses was shortened. “The implementation of the ‘circuit breaker’ in early April, and the extension to June 1, while necessary to contain the outbreak, will be a nail in the coffin for many locally oriented industries,” Seah said in the same report.