Worst Economic Recession Since Independence... Singapore Businesses Actually Increased

50,400 Newly Registered Companies This Year... Increase in Startups Related to Online Industries

[Asia Economy Singapore Correspondent Seo Jumi] In Singapore, which is experiencing the worst economic recession since its independence, the number of newly established businesses this year has actually increased.

According to the Accounting and Corporate Regulatory Authority (ACRA) of Singapore on the 8th, the number of newly registered companies from January to October this year was about 52,400, which is approximately 700 more than the 51,700 registered during the same period last year before the COVID-19 pandemic. In particular, after Singapore's strict lockdown measures ended in June, the average monthly number of new businesses increased to about 6,000.

By industry, the wholesale and retail trade sector had the highest number of newly established corporations at 16,700, followed by the information and communications sector with about 5,500 registered companies. This is interpreted as a result of related industries benefiting relatively due to the emphasis on online activities caused by national lockdowns and social distancing measures. With the expansion of online spending by Singaporean consumers, e-commerce from January to October increased by 60% compared to the same period last year.

Experts say that the number of new business registrations by ACRA does not fully reflect business activity, but it appears that companies see opportunities for startups in Singapore. The Ministry of Trade and Industry (MTI) of Singapore stated that although sectors such as aviation and tourism have been severely affected by the COVID-19 crisis, sectors like manufacturing, finance, insurance, and information and communications continue to grow.

However, there are forecasts that business closures in Singapore will also increase significantly. According to ACRA, about 35,400 business registrations were canceled from the beginning of this year to October. Although this is lower than the annual average of 41,100 from 2015 to 2019, support measures such as government job support plans and debt repayment deferrals are gradually decreasing, lending weight to predictions that business closures will surge in the coming months. In particular, offline retailers and companies slow to adopt digital transformation are expected to have a higher likelihood of shutting down.

An industry insider in restructuring said, "Inquiries about closures in the retail and food and beverage sectors have increased significantly." Most companies considering closure are found to have problems with cash flow.

Singapore's economic growth rate in the third quarter was -5.8%, showing signs of recovery compared to the previous quarter (-13.2%), leading MTI to revise this year's annual economic growth forecast upward from -7% to between -6.5% and -6%. Next year, gradual recovery is expected with a growth rate of 4% to 6%.

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