Singapore's economy contracted by 2.2% in the first quarter from a year ago, official preliminary data showed, and authorities further downgraded their GDP forecast for 2020 as countries around the world battle the coronavirus outbreak.
The Ministry of Trade and Industry said in a Thursday statement that the Singapore economy is now expected to shrink by between 1.0% and 4.0% this year. That's worse than its forecast last month for a change of between -0.5% and 1.5% in annual gross domestic product.
The ministry said the downgrade in economic forecast took into account "the weaker-than-expected performance of the Singapore economy in the first quarter, and the sharp deterioration in the external and domestic economic environment since February."
"The wider forecast range is to account for heightened uncertainties in the global economy, given the unprecedented nature of the COVID-19 outbreak, including the public health measures taken in many countries to contain the outbreak," it said in the statement.
COVID-19 is the official name of the coronavirus disease that has infected more than 400,000 people across 196 countries and territories, according to World Health Organization data. There have been over 18,000 deaths attributed to the virus globally, WHO data showed.
As confirmed cases climb, authorities around the world have taken measures that include closing borders and shutting down workplaces and schools to restrict the movement of people in order to stem the spread of the virus. The trade-off of those decisions is a hit to the economy, with many analysts warning that many countries could enter a recession this year.
Singapore was one of the earliest countries outside China to report cases of the coronavirus disease. The country has banned the entry of foreign visitors, shut bars and nightclubs, and limit crowd sizes. Singapore recorded its largest daily jump of 73 confirmed cases on Wednesday, bringing its total to 631 including two deaths.
Singapore is one of the earliest to release data on gross domestic product in the first quarter, providing a glimpse on how the ongoing coronavirus outbreak could affect economies around the world.
The Southeast Asian economy contracted by 2.2% year-over-year in the first quarter and 10.6% quarter-over-year, said the Ministry of Trade and Industry. The year-over-year contraction was the deepest Singapore has recorded since the first quarter of 2009 during the global financial crisis.
Economists polled by Reuters had expected the Singapore economy to contract by 1.5% year-over-year and 6.3% quarter-over-quarter.
"We were all being prepared for a bad print and these numbers are obviously not great," Stephen Davies, chief executive of Javelin Wealth Management, told CNBC's "Squawk Box Asia" after the data release.
"Given the degree to which we've seen such a significant shutdown in economic activity across the board, not just in Singapore but elsewhere around the world, these are the sorts of numbers we're going to be seeing globally as data begins to start reflecting those constraints that we have to put on economies as we deal with the virus," he added.
Singapore's GDP reading released on Thursday are preliminary estimates based on data in January and February and intended as an early indication of the economic situation in the first quarter, the ministry said. More complete data on Singapore's gross domestic product in the first quarter will be released in May, it added.