Singapore is one of the world's most open economies and one of the first to report growth data since the virus spread from China at the start of the year.
"COVID-19 is like an economic tsunami hitting Singapore's shores", said Selena Ling, head of research and strategy at the city-state's OCBC Bank.
The official gross domestic product (GDP) growth forecast by the Ministry of Trade and Industry (MTI) for Singapore for 2020 has been downgraded further to between -4 per cent and -1 per cent in Q1 of 2020.
"As the global COVID-19 situation is still evolving rapidly, there remains a significant degree of uncertainty over the severity and duration of the global outbreak, and the trajectory of the global economic recovery once the outbreak has been contained", the ministry said in a statement.
Singapore normally gives advance estimates before the quarter ends, but the figures do not cover the full period, meaning the revised reading - which will be released later - may be even worse.
The economy contracted 10.6 per cent from a quarter-on-quarter seasonally adjusted annualised basis, recoiling steeply from 0.6 per cent growth in the last quarter. The sector was weighed down by a decline in private-sector construction activities, supply chain disruptions and delays in the return of foreign workers as a result of lockdowns and travel restrictions by other countries in relation to the Covid-19 outbreak.
Meanwhile, the services industries contracted by 3.1% YoY, reversing the 1.5% growth in Q4 2019. Amongst segments, the air transport, accommodation, food services and retail trade sectors shrank on the back of falling tourist arrivals and domestic consumption.
In the previous quarter, there was a 2.3 per cent contraction, compared to the 0.5 per cent year-on-year contraction in the manufacturing sector. Although there was output expansion in the precision engineering and biomedical manufacturing clusters, this was substantially offset by the output contraction in the chemical and electronic clusters.
Supply chain disruptions and the drop in external demand also caused wholesale trade and other storage and transportation sectors to shrink.
According to MTI, small, positive growth was nonetheless recorded in the finance and insurance sectors, alongside the information and communications sectors.