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dpa
Kuala Lumpur
Singapore’s Finance Minister Heng Swee Keat proposes spending up to 55 billion Singapore dollars (38 billion US dollars) to cushion the wealthy city-state against a looming recession triggered by the global coronavirus crisis.
“As an open economy, we will be deeply impacted by these global shocks,” Heng, who doubles up as Prime Minister Lee Hsien Loong’s deputy, told parliament on Thursday afternoon.
Announcing what he termed a “resilience budget,” Heng projected that Singapore could spend up to 11 percent of its gross domestic product to counter what he said could be “a recession at least as bad as the global financial crisis.” Singapore, which has the world’s fourth-highest GDP per capita according to International Monetary Fund (IMF) rankings, will spend over 11 billion dollars of its estimated hundreds of billions of dollars in reserves, Heng said. Alex Holmes of British consultancy Capital Economics said that though Singapore’s economy is likely to be hit hard in the coming months, “a strong fiscal position means it has plenty of room” to spend heavily on counter-measures.
Heng’s announcement came hours after the Ministry of Trade and Industry reported that Singapore’s GDP contracted 2.2 percent year-on-year in the first quarter of 2020.
Citing the impact of a pandemic that John Hopkins University says has now killed over 21,000 people worldwide, including two in Singapore, the trade ministry said that Singapore’s economy will shrink between 1 percent and 4 percent in 2020, with the depth of the recession depending on the “severity and duration of the global outbreak.” Singapore’s coronavirus caseload remains relatively light at 631, but the number of cases is expected to rise as around 200,000 Singaporeans attempt to return home over the coming weeks.
“Public health measures have caused severe economic disruptions,” Heng said.
The collapse in global travel due to the pandemic has hit Singapore hard, with the ministry stating that tourism-dependent sectors “shrank on the back of a sharp decline in arrivals.”
Visitors from China, the source of around a fifth of Singapore’s tourists, have been banned since January. As the virus spread, travel bans were widened to take in other hard-hit countries, until the Ministry of Health announced on Sunday it would ban all tourists from either entering or and transiting through the nation.
The impact of restrictions has now spread into domestic industries, the trade ministry reported. “Supply chains have been disrupted as locked down workers are unable to work,” Heng said.
Reduced output in electronics, another bellweather sector, “likely reflects a fall in external demand,” the trade ministry stated.
Kuala Lumpur
Singapore’s Finance Minister Heng Swee Keat proposes spending up to 55 billion Singapore dollars (38 billion US dollars) to cushion the wealthy city-state against a looming recession triggered by the global coronavirus crisis.
“As an open economy, we will be deeply impacted by these global shocks,” Heng, who doubles up as Prime Minister Lee Hsien Loong’s deputy, told parliament on Thursday afternoon.
Announcing what he termed a “resilience budget,” Heng projected that Singapore could spend up to 11 percent of its gross domestic product to counter what he said could be “a recession at least as bad as the global financial crisis.” Singapore, which has the world’s fourth-highest GDP per capita according to International Monetary Fund (IMF) rankings, will spend over 11 billion dollars of its estimated hundreds of billions of dollars in reserves, Heng said. Alex Holmes of British consultancy Capital Economics said that though Singapore’s economy is likely to be hit hard in the coming months, “a strong fiscal position means it has plenty of room” to spend heavily on counter-measures.
Heng’s announcement came hours after the Ministry of Trade and Industry reported that Singapore’s GDP contracted 2.2 percent year-on-year in the first quarter of 2020.
Citing the impact of a pandemic that John Hopkins University says has now killed over 21,000 people worldwide, including two in Singapore, the trade ministry said that Singapore’s economy will shrink between 1 percent and 4 percent in 2020, with the depth of the recession depending on the “severity and duration of the global outbreak.” Singapore’s coronavirus caseload remains relatively light at 631, but the number of cases is expected to rise as around 200,000 Singaporeans attempt to return home over the coming weeks.
“Public health measures have caused severe economic disruptions,” Heng said.
The collapse in global travel due to the pandemic has hit Singapore hard, with the ministry stating that tourism-dependent sectors “shrank on the back of a sharp decline in arrivals.”
Visitors from China, the source of around a fifth of Singapore’s tourists, have been banned since January. As the virus spread, travel bans were widened to take in other hard-hit countries, until the Ministry of Health announced on Sunday it would ban all tourists from either entering or and transiting through the nation.
The impact of restrictions has now spread into domestic industries, the trade ministry reported. “Supply chains have been disrupted as locked down workers are unable to work,” Heng said.
Reduced output in electronics, another bellweather sector, “likely reflects a fall in external demand,” the trade ministry stated.
