The latest anti-Covid-19 measures introduced by the government on May 4 will effectively bring Singapore back to so-called “Phase Two” with tighter caps on physical gatherings and such.

However, Barclays economist Brian Tan believes that these measures are unlikely to create a substantial drag on economic activity.

“High frequency indicators such as Google mobility data suggest the Phase Three measures were not substantial enough to trigger a renaissance in economic activity after Dec 28 2020 – which implies a relatively limited cost to reversing them,” writes Tan in a report the same evening hours after the measures were announced by the government.

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“That said, social distancing measures could be tightened further if the COVID-19 outbreak continues to spread,” warns Tan, who is keeping his 2021 GDP forecast of 7.5%. The official estimate, for now, is at the upper end of the 4 to 6% range. 

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With a growing number of unlinked community cases, the number of people at each social gathering between May 8 and 30 will be capped back at five, down from eight now.

The number of distinct visitors to other households will be capped at five as well. Employers must ensure that no more than 50% of employees who are able to work from home return to the workplace at any time – down from 75% now. They are to implement stagger start times for their employees.

To reduce risks of community transmission, indoor gyms, health studios etc are to be closed, as these are small enclosed spaces where people exercise unmasked. Tighter border measures, including a longer quarantine period, will be implemented too.

Tan believes that the current outbreak – especially the involvement of new variants – will likely lead to the government maintaining a very cautious attitude to allowing a revival of international travel.

“Overall, we still expect the Monetary Authority of Singapore (MAS) to again leave its foreign exchange policy settings unchanged at its next policy review, likely on Oct 14 2021,” he adds.