Four days after GE2020, Ministry of Trade and Industry (MTI) announces that we have entered a technical recession. Advance estimates for Q2 2020 indicated that the economy contracted a whopping 41.2%. Year on year, the economy has shrank by 12.6%.
There is no hiding it, our economy is in deep, unprecedented recession territory. To help us navigate the uncharted waters, let us take a closer look at recessions and what they really are.
What is a Recession
Economists define recessions as a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in Gross Domestic Product (GDP) in two successive quarters.
What is that in plain English?
Here is an analogy.
Think of Singapore as a household. As with all households, working adults contribute to the household income. Daddy works in a factory, producing bicycles while Mommy runs her own online bakery selling cakes. During good times,