Singapore boosts Covid-19 stimulus by RM24.5b

New set of measures adds to Singapore’s total pledged pandemic aid of almost RM306b as economy contracted 42.9% in 2Q

SINGAPORE • Singapore Deputy Prime Minister Heng Swee Keat announced additional support measures of S$8 billion (RM24.48 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 yesterday.

The measures will be financed in part by unused expenditures from earlier budgets, and won’t require additional funds.

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 announcement comes as the city-state falls into a technical recession, retail and hospitality sectors are reeling from previous “circuit-breaker” restrictions and officials have warned that further retrenchments loom this year. Data last week showed Singapore’s economy shrank a record 42.9% on an annualised basis in the second quarter (2Q) from the previous three months, with Trade and Industry Minister Chan Chun Sing warning there could be “recurring waves of infection and disruption”.

The latest measures won’t require any additional use of past reserves beyond what was already approved, Heng said. The government now projects a budget deficit of S$74.2 billion for this fiscal year, S$100 million less than when the fourth package was announced in May.

The Singapore dollar pared the day’s gains after the speech, and was about 0.05% stronger on the day at 1.3702 to the US dollar as of 4:15pm in Singapore yesterday.

Export figures released yesterday 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 yesterday include:

  • S$1 billion to subsidise 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 vouchers to residents to boost domestic tourism; Ministry of Trade Industry will provide details next month.
  • As much as S$150 million to expand aid for start-up firms, including capital grant and mentorship opportunities. — Bloomberg