Singapore's economy contracted 2.2% year over year in the first quarter of 2020, compared with a 1.0% rise in the year-ago period and in the last three months of 2019, as the services and construction sectors plummeted amid the COVID-19 outbreak, preliminary government data showed.

The services sector fell 3.1% on an annual basis in the three months ending March, following a 1.5% rise in the previous quarter, due to a sharp decline in tourist arrivals impacting the air transport, accommodation, food services and retail trade industries and a drop in domestic consumption amid the coronavirus pandemic, the country's Ministry of Trade and Industry said.

The construction sector fell 4.3%, as opposed to a rise of a similar rate in the previous period. The manufacturing sector shrunk 0.5% on an annual basis in the first quarter, slowing from the 2.3% contraction recorded in the previous three-month period.

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On a seasonally adjusted annualized basis, Singapore's GDP plunged 10.6% quarter over quarter in the first three months of 2020 from the 0.6% growth recorded in the previous quarter and the 2.3% rise in the prior-year period.

In addition, the ministry lowered its GDP growth outlook for 2020 to between negative 4.0% and negative 1.0% from the previously projected range of negative 0.5% and 1.5%, citing the evolving situation surrounding the coronavirus pandemic.

The tourism and air transport sectors are "severely affected" by the ban on short-term visitors to Singapore, while retail trade and food services are facing losses due to a drop in domestic consumption as mass gatherings have been restricted.

Singapore's external demand could decline further, as several countries are curtailing economic activity, and could weigh on the country's manufacturing and wholesale trade sectors, the ministry said.

In light of the pandemic that has infected over 600 people in the region, the government unveiled an economic package of S$48 billion March 26, taking the value of the total stimulus to 11% of GDP, Bloomberg News and Reuters reported. Stimulus measures include wage support for employees in sectors including tourism, aviation and food services, aid for self-employed workers and the suspension of the property tax for certain sectors, among others.

The government would draw on its national reserves for the first time since the financial crisis to fund the program.

As of March 25, US$1 was equivalent to S$1.45.