Firms are expected to shed more headcount to bring down manpower costs.
Singapore’s unemployment rate may rise to 3.6% in 2020 from 2.3% in 2019, according to DBS Group Research. Amongst residents, unemployment rate could likewise expand to 4.2% by year-end, from 3.2% in the previous year.
The report also expects total retrenchments to rise to 45,600. It noted that even with the government’s support measures’ totalling $68.8b, a significant number of jobs could still be lost as the economy dips into an unprecedented deep recession.
“Companies may have to shed more headcounts to bring manpower costs to be in line with the fall in earnings. In addition, some companies with weaker financial standings could go belly up,” said Irvin Seah, economist at DBS Group Research. “The Singapore economy could sink into a deep and protracted recession. Many companies may crumble, and more jobs could be lost.”
He also added even if Singapore succeeds in bringing down the number of local cases, it will still be a long way before economic activities resume to normalcy. The recovery will likely be tepid due to fear of a second wave infection.
DBS is projecting Singapore’s headline GDP to fall 7% in the coming two quarters and may remain in negative territory until Q2 2021. It noted that it could contract by 7.8% in 2020 if it gets worse.
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