COVID-19 Movement Restrictions: 200,000 Job Losses and 10 Billion Singapore Dollars in Losses

Implemented for 4 weeks until the 4th of next month …Growth rate downgraded to a maximum of -6%

Expected to drop to -8% if extended by one month

[Asia Economy Singapore Correspondent Seo Jumi] Since Singapore implemented a strict movement restriction order to block the spread of the novel coronavirus infection (COVID-19), concerns over a job crisis have been growing. From the 8th, workplaces and various commercial facilities were completely closed and schools were shut down for 4 weeks, raising serious warnings that this could lead to the worst economic recession.

According to the daily Straits Times on the 14th, the restriction order in effect until the 4th of next month is expected to affect about 300,000 workers, which is one-third of Singapore’s total workforce, through job losses and other impacts. Among them, there are concerns that about 150,000 to 200,000 workers may face the risk of unemployment due to workforce reductions.

In particular, the service industry is suffering the most severe impact due to minimized contact. The proportion of locals in this sector is quite high, reaching 77%. Along with this, the Singapore government has decided to temporarily close Changi Airport Terminal 2 for 18 months starting from the 1st of next month. Terminal 2 is mainly used by the national carrier Singapore Airlines, but with a sharp decline in international flights, the terminal will not operate for the time being. Construction of Terminal 5 has also been postponed, and casinos and tourist attractions have all been closed, making economic damage inevitable.

The Straits Times cited economists from Maybank and DBS Bank, stating that more jobs could be lost during the 4-week 'circuit breaker' period, which would result in the worst economic recession since Singapore’s independence in 1965, surpassing even the past financial crisis.

Due to these movement restrictions, Singapore’s economic growth rate for this year is expected to be revised downward from -2.8% to as much as -6%. It is estimated that losses of about 10 billion Singapore dollars (approximately 8.5 trillion Korean won) will occur during this control period, and if the measures are extended by another month, the GDP contraction could reach 8%, according to some views.

Previously, the Singapore government had closed most workplaces and stores except supermarkets, hospitals, public transportation, and banks. All social gatherings with people not living together were also banned. On the first day of enforcement, the 8th, 7,000 cases of social distancing violations were detected.

To mitigate the resulting economic shock, on the 6th, the government announced a third budget plan to provide support totaling 5.1 billion Singapore dollars (approximately 4.3755 trillion Korean won). Priority was given to employment support with an allocation of 4 billion Singapore dollars, with the government covering 75% of wages per person. Additionally, a plan was made to directly provide 1.1 billion Singapore dollars to the public.

This content was produced with the assistance of AI translation services.