Photo: flickr.com

The Wuhan Coronavirus epidemic will likely have some adverse effects on Singapore’s tourism-related sectors in the coming months, while also throwing a spanner in the works of economic growth in the first quarter of this year, according to some economists.

With uncertainties still enshrouding the reach and spread of the virus, it is yet too early ascertain how much the overall economy will be impacted this year, the economists said to Channel News Asia (CNA).

Up until Tuesday (28 Jan), there are seven confirmed cases of the coronavirus virus in the country.

The Minister for Trade and Industry, Chan Chun Sing spoke at a multi-agency press conference on Monday (27 Jan) regarding Singapore’s economy, consumer and business confidence being affected, particularly the “immediate concerns” of the tourism sectors.

The effect on tourism will start appearing as early as February, as Song Seng Wun, the CIMB Private Banking economist remarked. This is especially due to the cessation of all group tours locally and abroad by the Chinese authorities which came into effect on Monday. The ratio of Chinese foreign tourists in Singapore is almost one fifth of the total visitors, Mr Song said.

“The latest measure will see visitor arrivals for February being affected and other frontline sectors, like retail and F&B (food and beverage), will also take some impact,” he further added and that  “the longer this ban stays in place, the bigger the impact…And if the developments over the next month prove to be not as favourable, then it won’t just be the Chinese that are travelling less but across all nationalities. That will further impact the tourism-related sectors here.”

Over the past few days, mass cancellations of travel plans have been made from China. Alicia Seah, the director of public relations and communications of Dynasty Travel stated that February’s bookings from China have “all been cancelled.”

OCBC’s head of treasury and strategy, Selena Ling opined that the fall in economic and business confidence as well as tour cancellations will probably “cast a shadow” over the country’s growth trajectory in quarter one of this year.

China has also extended the holiday break for Chinese New Year, which has meant that factory output will decline, as well as consumer spending because people will remain at home. These will lead to the slowdown, a “significant hit” on the Chinese economy in quarter one, HIS Markit economist Rajiv Biswas remarked.

In light of this, Singapore’s manufacturing exports such as intermediate, finished goods and raw materials will suffer due to “flow-on” effect of the fall in import demand from China, Mr Biswas added.

Economists: Net impact is yet too early to determine

 The three aforementioned economists agree that it is too early to determine the net impact of the outbreak on the country.

“The key questions are how long this will last, whether it will get more severe from here and what control measures are taken that might disrupt productivity…While people seem to be looking to SARS (Severe Acute Respiratory Syndrome) as a proxy, it is still too early to tell the full impact for now,” Ms Ling stated.

In a similar vein, Mr Biswas said that the overall impact on the economy is “highly uncertain, depending on the speed with which the Wuhan virus epidemic is contained.”

Consumer confidence yet appears to be unaffected currently, Mr Song added: “The thing to note is whether people are reassured by the immediate remedial measures that have been implemented. Compared with the SARS period where we were dealing with a virus outbreak for the first time, we’ve since had Zika and MERS (Middle East Respiratory Syndrome Coronavirus) and I think we are far better prepared in our preventive measures.”

“People seem to have gone on with their daily activities for now, though more are wearing masks. As long as people carry on with their daily lives, the impact on domestic activities won’t be as severe.”

A noticeable point according to economists is that, the contraction in economic growth and overall exports do coincide with the viral outbreak, meaning that there is less room for adjustment if a worst case scenario does occur.

Ms Ling is considering revising downwards her full-year growth estimate: “We were looking at 1 to 2 per cent for Singapore’s economy in 2020, but we may adjust to 0 to 2 per cent to accommodate the potential downside risks.”

Aid for businesses – how early and how large?

 On Monday, Mr Chan voiced that the government will put in place the necessary measures to aid businesses creaking under the impact of the viral outbreak, as was similar during the SARS epidemic in 2003.

Specifically for the tourism-related industries, measures include enhanced training grants, property tax rebates, a bridging loan programme for SMEs, and a reduction in foreign worker levy.

Waivers of taxi operator license fees and diesel tax rebates for taxis are also some of the targeted measures for the transport sector.

Whether the government will introduce a relief package of that magnitude in the coming Budget 2020, economists believe that it is still too early to tell.

There might be budget provisions to aid vulnerable travel sectors and tourism, Mr Biswas opined.

On the flip side, the government could be adopting a “wait and watch” approach to the whole epidemic issue as it is still in the early stages, Ms Ling remarked.

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
You May Also Like

陈清木回击张志贤 选举宪政问题与百姓生死存亡,孰轻孰重?

早前,国务资政兼国家安全统筹部长张志贤在国会指出,展延大选至超过规定期限有违宪法;也指组成看守政府建议“显得对宪法缺乏理解”。 对此,新加坡前进党秘书长陈清木医生录视频作出回应,并指张志贤“误解了他的重点”,并提出疫情当前和无法举行大选将面对的“宪政问题”,孰轻孰重?“答案是很明显的,我们讨论的是生死存亡的问题,人命关天,一定要把全部的精力和资源,用来对抗疫情。” 他指政府应集中精力,在未来12个月做好防疫、解决当前迫切的公共健康危机,确保国人的安全。 他也比喻,船固然需要船长掌舵,但如果过去数月我们有学到什么,那就是当船上的人都病了、疫情还在扩散,要找到避风港将是漫长的。 “在这情况下,480亿元的坚韧团结配套,恐怕将成徒劳。” 部长、各部门、医疗体系已面对重大压力 选举的时机可以等待,陈清木认为,当前部长和各部门所承受的压力已经很大了。如果现在还要选举,他们就得一心多用,还得确保如何安全地进行选举。 “关键是如何选择,如果尽早大选,将冒着让260万人口面对感染病毒的风险,将形成严重的公共健康危机。” 张志贤也提到,尽早选举让国人决定谁将领导国人未来,“但他(张志贤)能接受尽早选举,意味着让更多国人面对感染的风险?在医疗系统已面对重压的情况下,这是他愿意承担的风险吗?” 他直言,待疫情减缓后再选举,绝不是幻想而是客观的判断。“疫苗已在加紧研制,也加倍落实社会防疫措施,却越趋见效。” 他也指出,全球已加大抗疫力度,中国也是很好的例子,说明未来情况好转是可预期的,国人已被给予机会,等待疫情结束才选举。 即时无法如期大选,仍有法律应对情况…

因评论执法机构 警调查工人党候选人辣玉莎

警方称,接获两宗针对工人党盛港集选区候选人辣玉莎(Raeesah Khan)的投报,正调查辣玉莎。 后者被指在社交媒体评论新加坡执法机构,涉歧视公民,指富有华人和白人有不同待遇。 针对城市丰收教会判决,他也指新加坡无情监禁少数群体、骚扰清真寺领袖,但容许涉贪教会领袖逍遥法外。 警方称已咨询总检察署,总检察署认为,挑起不同族群或宗教敌意将抵触刑事法典第298A的罪行。

“在迪拜盖绿洲”,世博会新加坡馆设计方案释出

世界博览会每5年举办一次,各国也纷纷释出设计方案。我国在新加坡城市重建局,以及土地利用规划和保护机构领导下,宣布新加坡馆的设计方案。 根据《CNN》报道此次由新加坡建筑公司WOHA设计,以及Radius experience International建设,在阿拉伯沙漠中创建绿洲,试图打造一个”花园中的城市“,向世界展示新加坡的创新精神,以及作为一个有活力、宜居的自然城市的抱负。 世界顶级设计公司WOHA联合创始人黄文森表示,“我们试图向世界证明在任何一个地方,甚至是在沙漠中,都有可能建立一个自给自足的绿洲。” 参观者将会在地底层进入绿树成荫的世界,将游客带近圆锥体并穿过它们,随后会在经过露天商场平台,除了享受阳光雨棚的遮荫与5-10摄氏度细雾扇的冷却,还可以在此了解关于新加坡的信息,试图打造在炎热的沙漠下,仍然可以保持旅客们的舒适环境。 黄文森指出,新加坡是世界上数一数二的环保城市,因此借由各项技术与绿化的结合,向世界展示新加坡绿化技术与创新。 被问及如何维持室内温度,WOHA表示,该展馆完全依靠太阳能和太阳能海水淡化系统运作,在为期6个月的世博会期间,其能源消耗净值为零。 黄文森补充,他们并希望能够简化所有的工程,透过展馆的展出,可以呈现其可续行,及不会影响其生活品质的技术。

SRX data: Higher demand for HDB flats, rental apartments in March possibly due to pandemic

Market watchers believe that the measures deployed to combat COVID-19 pandemic is…