SARS outbreak slows economic growth in Singapore
SINGAPORE, May 19 Kyodo
A plunge in tourist arrivals caused by the outbreak of SARS slowed down Singapore’s economic growth in the January-March quarter, but the government expects the economy to remain in positive territory for the whole of this year, the Ministry of Trade and Industry said Monday.
The nation’s gross domestic product (GDP) grew 1.6% in the first quarter from a year earlier, the ministry said in its latest quarterly update on the economy. In the October-December quarter, GDP expanded 3% from a year earlier.
”All the major sectors worsened,” the ministry said. In particular, the sector of hotels and restaurants and the sector of transport and communications slowed down sharply ”due largely to the impact of SARS in March,” it said.
The hotel and restaurant sector shrank 8% in the first quarter over the same period last year while the transport and communications sector grew a meager 0.7%.
The tourism and air transport segments, however, account for only 8% of GDP ”so it will have to take a very big dip in tourist arrivals and the air transport sector” to drag the economy into negative territory, a ministry official said.
If tourist arrivals fall 30% to 40% this year, ”it will probably shave off between 1.1 to 1.6 percentage points for the economy this year.
The construction sector declined 12% and the financial sector dropped 5.5%, while the manufacturing sector grew 6.5% and wholesale and retail trade expanded by 5.7%.
The ministry said it is maintaining its earlier forecast of 0.5% to 2.5% growth for the economy this year but this is based on the assumption that the outbreak of severe acute respiratory syndrome (SARS) would not worsen in Singapore and abroad.
Last month, the government revised downward GDP forecast for 2003 from 2-5% to 0.5-2.5% due to the detrimental impact of SARS on the economy.
The government also unveiled a S$230 million (about US$129 million) relief package to help businesses in the tourism and transport sectors, which have been the worst hit by the epidemic.
Singapore missed a chance of being declared a SARS-free country by the World Health Organization on Sunday as a fresh SARS infection has cropped up in recent weeks.
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