Singapore is ending the year on a high as lockdown measures are further eased. But the transformation journey in the post-Covid world has only just begun.

No thanks to the Covid-19 pandemic, Singapore is set to end 2020 with its worst recession ever, with official estimates of a full-year contraction at between 6% and 6.5%. However, with local transmission of the disease somewhat under control, Singapore will end this unforgettable year with some cheer. With effect from Dec 28, the republic will enter the so-called Phase Three re-opening, with further easing of restrictions put in place to curb the spread of Covid-19.

However, economists believe that the positive impact of Phase Three will be muted relative to Phase Two, which marked the end of an unprecedented lockdown of nearly two months. For example, while groups of eight now can dine together instead of a limit of five, other restrictions, such as shorter operating hours remain. Large-scale events are still forbidden though. “Most economic
activities had already resumed or were already set to reopen under the first two phases, albeit with notable constraints on capacity,” says Barclays’ economist Brian Tan. The higher capacity limits under Phase Three may give more headroom for growth in 2021, but will not “significantly alter the economic landscape”, he adds.

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