Singapore on Friday eased restrictions further and reopened the pockets of the economy, which were suspended due to the coronavirus, but retailers do not hope that this move will do much to boost their already heavy business, according to the industry association.
The economy of Southeast Asia has been hit hard because measures – both abroad and domestically – to curb the spread of the virus have stopped much of global economic activity. Singapore’s economy is expected to contract 4-7% this year, according to an official forecast.
“Retailers are definitely facing significant financial stress during this period. Whether large or small, it’s really hard for them to fulfill their financial obligations, ”said Rose Tong, executive director of the Singapore Association of Retailers, in an interview with CNBC Street Signs Asia. Friday.
“They don’t really hope that the business will be the same as usual … even after the first two weeks of shopping euphoria or what we call shopping out of revenge,” she said, adding that some retailers expect sales to fall about by 50%. due to a weakening economy.
The country is one of the most affected in Asia from an outbreak of coronavirus: according to the Ministry of Health, more than 41,000 confirmed cases of the disease were reported on Thursday. According to official figures, more than 90% of these cases were detected among migrant workers living in dormitories. These workers are mostly men from other Asian countries who work in low-paid jobs.
Reducing the number of cases found outside of dormitories paved the way for Singapore will resume its economy starting June 2, after almost two months of partial blocking, which the government called the “switch.” Further easing on Friday allows more actions to be resumed with precautionary measures, including purchases at physical retail stores and dine out.
The lifting of restrictions in the country took place earlier than expected, which could help limit the slowdown in economic growth in Singapore, said Selena Lin, head of treasury research and strategy at Singapore’s OCBC Bank.
“We can indeed see some unmet demand, and retail sales may decline slightly in June,” she told CNBC in an interview with Capital Connection on Friday.
“But I would like to warn that it will probably be a rather muffled recovery from now on. “The litmus test would probably be in two weeks, when we see if there are any rises in terms of Covid-19 cases returning.” she said, referring to the name of coronavirus disease.
Ling explained that China’s experience has shown that resuming business can hinder any recovery in consumer demand. However, according to her, the latest figures show that Singapore’s economy passed through it in April.
This, along with planned government spending, could help Singapore’s economy record a 5% less severe decline this year, Lin said.
The government announced four stimulus packages worth about 100 billion Singapore dollars (71.8 billion dollars), or almost 20% of the gross domestic product.