Singapore to see recession as lockdown extends, Citigroup warns

Singapore might see a deeper recession for 2020 after the city-state extended its partial lockdown, investment banking company Citigroup Inc warned on Tuesday.

The nation’s GDP could shrink by 8.5% in contrast to its previous forecast of a 6% contraction, according to a note by economists Wei Zheng Kit and Kai Wei. The change in estimate came after Singapore announced that it would extend its “circuit breaker” measures until June 1 in a bid to slow down the COVID-19 outbreak.

The economists wrote that the extension would bring 25%-30% of the nation’s GDP to a standstill with an additional reduction of 2%-2.5% for every month in lockdown.

The government on Tuesday also pledged to roll out S$3.8 billion ($2.7 billion) in fiscal stimulus on top of the near S$60 billion package announced prior.

Singapore currently has the most cases in Southeast Asia.