Singapore Boosts Stimulus by S$8 Billion as Recession Deepens

Pedestrians wearing protective face masks pass along Orchard Road in Singapore, on Saturday, July 25, 2020. Singapore’s economy plunged into recession last quarter as an extended lockdown shuttered businesses and decimated retail spending, a sign of the pain the pandemic is wreaking across export-reliant Asian nations.

Pedestrians wearing protective face masks pass along Orchard Road in Singapore, on Saturday, July 25, 2020. Singapore’s economy plunged into recession last quarter as an extended lockdown shuttered businesses and decimated retail spending, a sign of the pain the pandemic is wreaking across export-reliant Asian nations. , Bloomberg

Singapore Deputy Prime Minister Heng Swee Keat announced additional support measures of S$8 billion ($5.8 billion) to cushion the blow from the coronavirus pandemic, extending wage subsidies and aiming to shore up the hard-hit aviation and hospitality sectors.

The new set of measures, announced almost three months after the last package, adds to Singapore’s total pledged pandemic aid of almost S$100 billion, Heng, who is also finance minister, said in a taped speech aired Monday.

While Singapore has managed to bring virus cases under control, the global economy “remains very weak,” Heng said. “We must continue to adapt to the rapidly changing situation. We designed our measures to give us flexibility for adjustments as the crisis progresses. Some of these measures are ending soon.”

The latest measures won’t require any additional use of past reserves beyond what was already approved, Heng said. Unused expenditures from earlier budgets will help fund the latest measures, allowing the government to narrow the projected budget deficit this fiscal year by S$100 million since the fourth package was announced in May, to S$74.2 billion.null

Further support was deemed necessary as the city-state has fallen into a technical recession, retail and hospitality sectors are struggling to recover from months of mobility restrictions, and officials have warned of further retrenchments through year-end.

Singapore’s economy shrank a record 42.9% on an annualized basis in the second quarter from the previous three months, data last week showed, with Trade and Industry Minister Chan Chun Sing warning there could be “recurring waves of infection and disruption.”

Export figures released Monday showed tentative signs of recovery in July, with non-oil domestic shipments jumping 6% from the same time last year, beating estimates for a second straight month.

Other measures announced Monday include:

  • S$1 billion to firms that increase local worker headcount over the next six months; government will provide wage subsidies of as much as 25% for each new hire younger than 40 years old, and as much as 50% for those 40 or older
  • S$320 million in credits to boost domestic tourism; MTI will provide details next month
  • As much as S$150 million to expand aid for start-up firms, including capital grant and mentorship opportunities

By : Michelle Jamrisko and Faris Mokhtar, Bloomberg News

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s