Singapore’s economy hit its worst quarterly GDP figures in its 55-year history. Prolonged Covid-19 lockdown has resulted in a slump in demand, which has engulfed Singapore in a recession. Singapore and India have deeply entrenched trade ties. How will India be affected by Singapore’s recession?
Crux of the Matter
Singapore’s Technical Recession A technical recession is 2 consecutive quarters of quarter-on-quarter (q-o-q) contraction. Singapore’s economy shrank by nearly 41% of its GDP q-o-q and 12% on a year-on-year (y-o-y) basis in the April-June quarter. Moreover, the Construction sector plummeted by 95.6% and the Services sector contracted by 37.7%. To recover its economy, the government of Singapore has announced a Covid-19 stimulus package amounting to $67 bn. Singapore has reported ~47,000 cases and ~25 deaths as of 15th July. Singapore’s economy depends heavily on trade and service sectors, which have been affected severely by Covid-19. The Services sector, including Financial Services, accounts for nearly 70% of Singapore’s GDP. Singapore’s GDP is mainly driven by, 1. exports in electronics manufacturing and machinery 2. financial services 3. tourism, and 4. being one of the world’s busiest cargo seaports.
Close Ties With India Both countries signed a Comprehensive Economic Cooperation Agreement in 2005. The key components of the agreement are as follow:
Free trade agreement for goods
Arrangement for boosting trade in services, including financial services
Package to promote investment flows and provide mutual investment protection
New agreement for avoiding double taxation
Reliance On Each Other
Singapore is the second-largest FDI provider for India.
India has the highest overseas investment in Singapore.
Singapore accounts for 38% of India’s trade with ASEAN member nations and 3.4% of its total foreign trade.
Nearly 9,000 Indian companies have a presence in Singapore, forming the largest overseas contingent of firms registered in Singapore.
India is also the 3rd largest source of tourists for Singapore, with arrivals growing at 10-15% annually.
A total of 18 Indian cities are connected to Singapore through over 500 weekly flights.
Singapore is the core nervous system for startups in Southeast Asia, with an enormously business-friendly environment and easy access to venture capital
Curiopedia
Singapore Changi Airport is a major civilian airport that serves Singapore. It is currently rated the World’s Best Airport by Skytrax for the eighth consecutive year since 2013. Jewel Changi is a nature-themed entertainment and retail complex on the landside of Changi Airport, Singapore.
“Little red dot” is a nickname often used in the media, and in casual conversation, as a reference to Singapore. It refers to how the nation is depicted on many maps of the world and of Asia as a red dot.
The English name of Singapore is an anglicization of the native Malay name for the country, Singapura, which was in turn derived from the Sanskrit word for lion city.
Curated Coverage
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