Rise in COVID cases drives Singapore back to stricter measures

Singapore, the Asian city-state that has been among the world’s best at containing the Covid-19 pandemic, is back on the defensive, reimposing local restrictions and tightening its borders amid a pop in cases.

With infections in the community sometimes reaching double digits among a population of 5.7 million, the government last week started limiting social gatherings, curbed entry for most foreign workers and ordered mass testing across industries and areas where new cases have arisen.

The setback risks slowing Singapore’s economic recovery and complicates plans to host high-profile global gatherings, including the Davos-based World Economic Forum in August and the Shangri-La Dialogue next month, which it had hoped would showcase its control of the virus. It also has stalled a rally in the one of Asia’s best-performing stock markets, with Singapore’s benchmark index slipping 1% so far this month.

“Growth may stall with the the latest curbs, just as the recovery was starting to take shape,” said Chua Hak Bin, senior economist at Maybank Kim Eng Research Pte. in Singapore. “Singapore may face a double-dip recession if the government is forced to reintroduce circuit-breaker measures in a worst-case scenario where the mutant virus outbreak worsens.”

Rising cases in Singapore — which topped Bloomberg’s most recent Covid resilience ranking — also reflect the growing challenges for developing countries in Asia as the pandemic rages. The Philippines and Thailand in Southeast Asia, as well as nations bordering India such as Bhutan and Nepal, have seen significant surges in infections in recent weeks.

The threat had been easing for Singapore until new clusters started to emerge a few weeks ago, including cases with the highly contagious Covid-19 variant first detected in India. Three weeks’ worth of tighter social-distancing measures kicked in Saturday, with officials saying they’re necessary to prevent a harsher lockdown similar to one last year. Singapore will reduce approvals for most foreign workers in coming weeks, and is delaying the arrival of many workers who already had received approval to enter.

“We will immediately strengthen our defense against the more infectious mutant variants,” Transport Minister Ong Ye Kung, who’s slated to become health minister later this month, said in a Facebook post Sunday, laying out new restrictions and tests for high-risk workers at the airport and seaports. “We need to protect our frontliners in order to protect the rest of Singapore.”

Economic Risks

Singapore’s economy started the year on stronger footing, growing 0.2% year-on-year in the first quarter as manufacturing expanded, while contractions in construction and services moderated. The Monetary Authority of Singapore said late last month it sees the economy likely rebounding at a faster pace this year than the government’s 4%-6% projection.

“Prolonged Covid-19 control measures present downside risks to our positive views on the financial, healthcare and land transport sectors,” RHB Bank Bhd analyst Shekhar Jaiswal wrote in a note Monday. “The current tighter control measures are negative for retail REITs with exposure to downtown malls.”

The new restrictions raise the level of uncertainty for companies employing foreigners in Singapore, though they aren’t yet likely to have a long-term impact.

Member companies in the local British Chamber of Commerce “understand the need for measures to be continually reviewed for the safety of all residents and the economy,” said David Kelly, the chamber’s executive director. “In our latest membership survey completed just a few weeks ago, 94% of respondents reaffirmed their confidence in Singapore as a long-term business hub.”

A rise in unlinked cases also could jeopardize Singapore’s travel bubble with Hong Kong, currently scheduled to begin May 26. According to the terms of the agreement, the air-travel corridor will be closed for two weeks if the seven-day moving average of daily unlinked local cases is more than five in either city.

New Cases

An additional 10 Covid-19 cases were reported by the country’s health ministry late Sunday, including several not linked to any previous cases. Four individuals were connected to an earlier cluster at Changi Airport and three to a cluster at Tan Tock Seng Hospital.

The number of unlinked virus cases in the local community has risen to 13 in the past week, from 10 the week before, the government said Sunday.

Singapore will expand virus testing to about 9,000 workers at two of the airport’s terminals and the connected Jewel shopping mall. Close to 4,000 port workers will undergo testing after four people at the city-state’s seaport facilities were found to have Covid-19 over the past 10 days. The Maritime and Port Authority said Sunday that 2,750 people so far have tested negative.

The mass testing strategy will include about 2,200 students, staff and visitors at Victoria Junior College after a student registered positive for the virus in recent days, the Ministry of Education said Saturday. More than 100 people who are close contacts of the infected student will be quarantined as well.