By Amanda Lee
SINGAPORE--Singapore is rolling out a US$778 million package to help businesses and households cope with the impact of the war in the Middle East, the government said Tuesday as it warned about the economic risks posed by the conflict.
"We cannot predict how exactly events will unfold, or when the conflict will end. What we do know is that Singaporeans are already feeling some of the effects on the ground," said Jeffrey Siow, senior minister of state for finance in parliament on Tuesday.
Global oil and gas prices have soared significantly after the conflict erupted at the end of February. The Strait of Hormuz--a vital waterway connecting the Middle East's biggest oil producers to the rest of the world --also remains closed.
Petrol and diesel prices in Singapore have risen sharply, in line with global oil prices, and are likely to remain high for some time, Siow said.
Rising fuel prices have weighed on the earnings of platform workers, private-hire car drivers and taxi drivers. To help these individuals, the government will offer them S$200 in cash from the end of April.
The disbursement of government vouchers has also been brought forward to June 2026 from January 2027 to help Singaporeans cope with the higher cost of living.
Singapore's growth will likely be pressured in the coming quarters by the Middle East conflict, while inflation is expected to pick up, said Deputy Prime Minister Gan Kim Yong.
"As a small and highly open economy, Singapore will not be able to insulate ourselves completely from this crisis," said Gan.
Early data indicate that Singapore's economic activity continued to be resilient in the first quarter of the year, said Gan. However, some sectors, such as manufacturing and downstream chemicals, will feel the conflict's impact more than others, he said.
The Ministry of Trade and Industry will continue to monitor developments closely and will update its growth forecast in May, Gan added.
A protracted conflict could drive up imported prices through higher inflation in Singapore's source markets. Such pressures will be felt by households through more expensive electricity, transportation and daily necessities, Gan said.
As the conflict drags on, governments around the world are increasingly concerned over fuel supplies.
Singapore has so far not tapped its fuel reserves nor implemented fuel rationing, said K. Shanmugam, coordinating minister for national security and minister for home affairs.
"We are also planning to increase our fuel reserves. It will be costly, but we think it necessary," said Shanmugam.
Singapore is concerned about broader disruptions to global supply chains, which can affect goods critical to the Singapore economy and essential services, he added.
Write to Amanda Lee at amanda.lee@wsj.com
(END) Dow Jones Newswires
04-07-26 0446ET
