City-state draws on national reserves
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%.