Sin­ga­pore plans ex­pan­sion­ary bud­get as growth pil­lars fal­ter

The Pak Banker - - 6BUSINESS -

Sin­ga­pore said it will adopt an ex­pan­sion­ary fis­cal pol­icy to boost growth, pledg­ing sup­port for com­pa­nies that are fac­ing la­bor con­straints and an un­even global re­cov­ery.

The gov­ern­ment will give big­ger tax re­bates and pro­vide small and medium-sized com­pa­nies with ac­cess to more than S$2 bil­lion ($1.5 bil­lion) of loans, Finance Min­is­ter Heng Swee Keat said in his first bud­get speech to Par­lia­ment on Thurs­day. It will de­fer levy in­creases for for­eign work­ers in the marine sec­tor, where rig builders are warn­ing of more dif­fi­cul­ties ahead amid low oil prices. Gov­ern­ments around the world are un­der pres­sure to ramp up fis­cal sup­port as some cen­tral banks re­sort to neg­a­tive in­ter­est rates, and Sin­ga­pore is among the most vul­ner­a­ble in Asia to swings in global de­mand. Ruc­tions in the world econ­omy are com­ing at a time when cracks are show­ing in the is­land's tra­di­tional pil­lars of growth such as man­u­fac­tur­ing and elec­tron­ics, and as it faces an ag­ing pop­u­la­tion.

"The need to re­struc­ture is both ur­gent and crit­i­cal," Heng said. "Pro­duc­tiv­ity has not been as strong as we would like" and "we must keep work­ing on this," he said.

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