By Ben Otto and P.R. Venkat
Singapore will pump an additional 33 billion Singapore dollars (US$23.17 billion) into relief measures for businesses and workers hurt by the Covid-19 pandemic amid signs that the economy is on pace for its worst annual performance on record.
The fiscal package unveiled Tuesday is aimed at softening the impact on businesses and workers affected by the government's ongoing movement restrictions to contain the spread of the coronavirus, Finance Minister Heng Swee Keat said in parliament.
The spending, which brings the total amount the government has allocated to pandemic-related stimulus packages to more than S$96 billion, came after government data earlier in the day pointed to a grimmer-than-expected picture for the Singaporean economy this year. Authorities now expect gross domestic product to contract between 4.0% and 7.0%, from a decline of 1.0% to 4.0% predicted two months ago.
The new forecast, if it materializes, will be the country's worst contraction since independence in 1965.
Singapore is "facing an facing unprecedented level of uncertainties," Mr. Heng said.
The Southeast Asian country has been in a state of partial lockdown since early April, with borders closed, many offices shuttered and social-distancing measures implemented to prevent gatherings beyond family members. Officials intend to begin relaxing some measures in early June, but travel and full-scale business activity could still be months away.
Mr. Heng, who is also the deputy prime minister, said the new spending will aim to create jobs and protect livelihoods by raising the government's allocation for wage support, offering worker training, adding hiring incentives and ensuring businesses have access to cash flow and credit. The government will put aside S$13 billion for contingencies, he said.
To fund the program, Singapore will draw on its past reserves for the second time this year, raising its overall budget deficit in the fiscal year starting April to 15.4% of GDP.
Mr. Heng said he expects most businesses to open by July, but added that workers and businesses alike will have to adapt to a new normal as restrictions linger and consumer behavior changes.
"Life will not return to what it was before Covid-19," Mr. Heng said. "We must be prepared for tough times in the months ahead."
Write to Ben Otto at firstname.lastname@example.org