The predictions are out: Singapore could see between 150,000 and 200,000 retrenchments this Covid-19 season as circuit breaker measures have kicked in from April 7 until May 4.
This bad news prediction comes despite the government’s three stimulus packages meant to prop up a bruised and battered economy.
Maybank and DBS economists interviewed by the mainstream media have predicted that “circuit-breaker” measures in place for at least four weeks will decimate jobs.
The damage could all count towards the worst recession on record since independence in 1965.
Some 1.3 million workers, about one-third of Singapore’s entire workforce, including foreign workers, are forced into “hibernation” as a result of circuit breakers.
The DBS economist predicted a 2.8 per cent to 4 per cent contraction.
Maybank economists have predicted a 6 per cent negative growth.
The latest official government 2020 gross domestic product (GDP) forecast range is -4 to -1 per cent for the year.
But these numbers could all be revised downwards.
Another month of extension of the circuit breakers could see a negative 8 per cent full-year GDP growth.
One month of circuit-breaker measures is estimated to cost Singapore’s economy roughly S$10 billion, or 2 per cent of the GDP in 2019.
There were 10,690 retrenchments in the whole of 2019, the Manpower Ministry’s labour market report showed in March 2020.
2020 will be a major bloodletting exercise.
The service industry will be one of the most badly hit this time.
Some 77 per cent in this sector are Singaporean workers, but more than half of the retrenchments could involve foreign workers.
Retrenchments according to previous recessions
Here are the numbers for comparison.
The 2008 to 2009 global financial crisis saw around 40,000 retrenchments.
The 1997 Asian financial crisis resulted in around 30,000 jobs disappearing.
The Unity, Resilience and Solidarity Budgets were announced by Deputy Prime Minister Heng Swee Keat on Feb. 18, March 26 and April 6 respectively.
They require a historic drawdown of S$21 billion from Singapore’s past reserves.
Altogether, S$59.9 billion was set aside for the national fight against the Covid-19 pandemic.
You can read the report on CNA for all the details.
Top photo via Pixabay