Singapore adds $3.6b to stimulus amid Covid-19

Bloomberg

Singapore increased its cash payout to individuals and announced additional steps to save jobs as the city-state prepares to severely curtail activities to contain a spike in coronavirus cases.
The third virus-related stimulus package in two months will cost S$5.1 billion ($3.6 billion), taking the nation’s total virus relief to almost S$60 billion, or 12% of gross domestic product, Deputy Prime Minister Heng Swee Keat said on Monday in Parliament.
The government will seek to draw an extra S$4 billion from past reserves, and will push up its budget deficit in the current fiscal year to 8.9% of GDP,
he said.
Trade-reliant Singapore is reeling from the impact of the coronavirus outbreak, with the government predicting a 1%-4% contraction in the economy this year.
That’s even before new restrictions on movement begin on Tuesday, including the closing of schools and non-essential businesses.
“The primary aim of this solidarity budget is to take further steps to save jobs and protect the livelihoods of our people during this temporary period of heightened measures,”
Heng said.
Singapore’s equity benchmark, the Straits Times Index, extended gains to as much as 3.7% after Heng announced the new stimulus package.
The government already had requested to tap S$17 billion in past reserves for its second stimulus package.
President Halimah Yacob, in a Facebook post, said she gave her in-principle support to use the additional reserves.
An accelerating virus caseload in recent weeks — now increasingly made up of local clusters rather than Singaporeans returning from overseas — culminated in the country’s largest one-day total of confirmed cases on April 5, at 120.
The fresh stimulus was announced a week after the Monetary Authority of Singapore took unprecedented action to ease policy, while commenting that fiscal policy would have to take the “primary role” in efforts to shore up the country’s economy.
Economic data have already turned sour: February retail sales fell the most since last June and the city-state’s purchasing managers index plunged in March to its weakest level in 11 years.
Hard-hit industries, including tourism and food and beverage, have been seeking support to cope with new restrictions on eating out.
A coalition of more than 500 restaurants wrote to Prime Minister Lee Hsien Loong that the next month would be “do or die” for many outlets, requesting policies like relief from rent bills, the Straits Times reported.