KUALA LUMPUR — Singapore will spend an additional 33 billion Singapore dollars (23.2 billion US dollars) to offset the economic impact of coronavirus, Finance Minister Heng Swee Keat announced in parliament on Tuesday.
The revised fiscal plan is the wealthy city-state’s fourth budget announcement since February and takes total spending pledges to just under 100 billion Singapore dollars – equivalent to almost 20 per cent of gross domestic product (GDP).
Labelling the projected spending as a “fortitude budget,” Heng, Prime Minister Lee Hsien Loong’s deputy, said the outlay is necessary due to the “unprecedented uncertainty” caused by the pandemic.
Earlier on Tuesday, Singapore’s Ministry of Trade and Industry said that GDP shrank 4.7 per cent in the first quarter of the year – indicating that the pandemic ravaged the trade-dependent economy even before the lockdown was imposed in April.
Citing “a significant degree of uncertainty over the length and severity of the Covid-19 outbreak,” the ministry revised Singapore’s GDP forecast for 2020 downwards, projecting a contraction of between 4 and 7 per cent.
Even the best-case scenario projected by the Trade Ministry would be worse than the 2008-9 global financial crisis and the Asian crisis of the late 1990s.
In March, before Singapore went into lockdown, the ministry predicted a drop of between 1 per cent and 4 per cent. Since then, the ministry said, “the disruptions to economic activity in major economies around the world have been more severe than expected” – a blow to Singapore where a small domestic market means reliance on trade with and investment from overseas.
“Our economy has been deeply impacted by the global shocks,” Heng said on Tuesday.
Singapore’s first-quarter GDP contraction would have been even sharper without the pharmaceuticals sector surging, according to the ministry.
The pandemic has had the opposite impact on other sectors, most of which felt a “sharp pullback in growth as a result of weaker global demand and disruptions in supply chains,” it said.
Some restrictions are due to be lifted after June 1, with the government announcing last week that transit flights could resume through Changi Airport, a widely-used hub for travellers between the Asia-Pacific region and Europe.
However National Development Minister Lawrence Wong warned on Monday that the reopening will be slow.
“There are bound to be other undetected asymptomatic cases in the community,” said Wong, who oversees Singapore’s response to the pandemic.
“The key is to reopen safely, and this has to be done carefully,” Heng said on Tuesday.
The Health Ministry reported 383 coronavirus cases on Tuesday, taking the national total to 32,243, the second-highest recorded in East Asia after China.Show