City-state draws on na­tional re­serves

The Star Malaysia - StarBiz - - Front Page -

SIN­GA­PORE: Sin­ga­pore de­liv­ered a sec­ond stim­u­lus pack­age of S$48bil (Us$33bil) to fight the coro­n­avirus out­break, draw­ing on na­tional re­serves for the first time since the global fi­nan­cial cri­sis to sup­port an econ­omy head­ing for re­ces­sion.

The ad­di­tional spend­ing will push up the govern­ment’s virus-re­lated re­lief to al­most S$55bil, or 11% of gross do­mes­tic prod­uct (GDP), Fi­nance Min­is­ter Heng Swee Keat said in a speech in Par­lia­ment yes­ter­day. The ex­tra stim­u­lus will push this year’s bud­get deficit to 7.9% of GDP, Heng said.

“This ex­tra­or­di­nary sit­u­a­tion calls for ex­tra­or­di­nary mea­sures. We have saved up for a rainy day. The Covid-19 pan­demic is al­ready a mighty storm, and is still grow­ing,” he said.

The stim­u­lus pack­age comes as gov­ern­ments around the world step up fis­cal sup­port, with the pan­demic forc­ing a wide­spread eco­nomic shut­down. It also comes just five weeks af­ter Heng’s an­nual bud­get, which had al­lo­cated S$6.4bil for health care and sup­port to busi­nesses and house­holds hurt by the virus out­break.

Sin­ga­pore’s out­look has de­te­ri­o­rated sub­stan­tially, with the govern­ment ear­lier down­grad­ing its growth pro­jec­tions for this year to a con­trac­tion of 1% to 4%.

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