Singapore unveils $48-billion Resilience Budget to tide people, businesses through COVID-19 pandemic
Singapore committed an additional S $ 48 billion (US $ 33.17 billion) to support its businesses and households after preliminary official estimates showed that Southeast Asia’s economy contracted more-than-expected in the first quarter of this year.
Additional stimulus spending began just a month after the country announced a S $ 6.4 billion ($ 4.4 billion) package of economic and health measures to tackle the ongoing coronavirus pandemic. Together, the two support packages account for about 11% of Singapore’s gross domestic product.
«This is an iconic package and a necessary answer to a unique situation.», – said on Thursday in Parliament by Deputy Prime Minister and Finance Minister of Singapore Heng Soo Kit.
Heng said the government will raise up to S $ 17 billion (US $ 11.78 billion) from the country’s reserves to fund the new measures. Singapore President Halima Jacob, in a written statement read out by the Speaker of Parliament, said that she had given her consent in principle to use the reserves.
The exact amount of Singapore’s reserves is a state secret, but according to various estimates, it is estimated at hundreds of billions of US dollars..
This is just the second time that Singapore is starting to tap its reserves. This first happened in 2009, during the global financial crisis, when the government raised S $ 4.9 billion (US $ 3.40 billion).
Heng’s new measures include payroll subsidies to help businesses retain their workers, provide income tax deferral for companies and self-employed individuals, and provide cash payments to Singaporeans..
Heng also provided additional support to specific sectors hit hard by the coronavirus outbreak, including aviation, tourism, ground transportation, arts and culture..
The minister added that the aviation sector will receive additional support of S $ 350 million (US $ 243.26 million). Flagship Singapore Airlines will announce «corporate action» with the support of the state investment company Temasek Holdings.
Singapore Airlines cut passenger traffic by 96% until the end of April. Airline Shares on Singapore Stock Exchange Suspended on Thursday Pending Announcement.
Singapore became one of the first countries outside of China to report cases of the disease, which was officially named COVID-19. The country recorded the largest daily jump of 73 confirmed cases on Wednesday, bringing the total to 631 cases, including two deaths..
Ahead of the stimulus announcement, Singapore released preliminary estimates of its economic performance for the first quarter. The country was one of the first to release data on gross domestic product, which gives an idea of how the outbreak of the virus could affect the global economy..
The Department of Commerce and Industry reported that Singapore’s economy contracted 2.2% year-over-year and 10.6% in the first quarter. Annual contraction was deepest in Singapore in 2009 during the global financial crisis.
Economists surveyed by Reuters expected Southeast Asia’s economy to contract 1.5% yoy and 6.3% qoq.