SINGAPORE — The government will do “all that is necessary” to help workers and companies recover from the fallout of the COVID-19 coronavirus outbreak through various measures to be unveiled in Budget 2020 on Tuesday (18 February), Deputy Prime Minister Heng Swee Keat said.
Heng, who is also Finance Minister, noted that some sectors have been harder hit, such as tourism and transport, and that the government has already taken targeted measures to support them.
“But we can expect to see a broader impact on the economy....On Budget Day on Tuesday, I will set out a set of broad-based measures to support viable companies and help workers stay in their jobs,” Heng said in a video posted on Facebook on Sunday (16 February). The recording was made at the Kallang Fire Station, where he met Singapore Civil Defence Force officers.
Other measures include wage support to help companies preserve jobs for local workers, tax rebates and rental waivers for firms to address cash flow issues, Heng said.
The government plans to give more support for sectors that have been harder hit by the outbreak, including food and beverage, and retail, he added.
To position Singapore to “emerge stronger when the eventual upturn comes”, Heng said the government will also support firms and workers to make best use of this period to restructure, train and upgrade, he added.
The government will also introduce a package to help households with the cost of living amid the economic uncertainty, Heng said.
"I assure you, as Finance Minister, that this government will do all that is necessary to get workers and companies hit hard by this global health crisis back on their feet. With all these additional support measures, you have my assurance that we will rebound from this. Never fear.”
Last Thursday, the government and industry players announced that they would jointly provide a S$77 million support package for taxi and private-hire car drivers affected by plummeting ridership as a result of the outbreak.
Singapore on Monday cut its 2020 forecasts for economic growth and exports due to an expected blow from the outbreak.
The Ministry of Trade and Industry (MTI) forecast full-year gross domestic product growth to be between -0.5 per cent and 1.5 per cent, with the figure likely to fall around the mid-point of 0.5 per cent. It had expected growth of 0.5 to 2.5 per cent in November.
As for non-oil domestic exports (NODX), Enterprise Singapore projected a range of between a 0.5 per cent decline and 1.5 per cent growth, down from its previous forecast of 0 to 2 per cent growth.
Last Friday, Prime Minister Lee Hsien Loong said Singapore’s economy will definitely “take a hit” from the outbreak and warned that a recession is possible.
Selena Ling, head of research and strategy at OCBC Bank, said, “What is clear is that the COVID-19 outbreak has overtaken the US-China trade war as the predominant risk facing the Singapore economy, both in terms of the more widespread, severe and protracted impact.”
The downgrade in MTI’s 2020 official GDP forecast was widely expected as the outbreak had “decimated the green shoots theme” from the end of last year, Ling said.
“Trade data is still the canary in the mine shaft,” she added, noting that the earlier stabilisation in the NODX growth was mainly based on a modest improvement in global growth and demand, which appears to have been thrown off-track by the impact of the sudden COVID-19 outbreak.
It is too early to call for a second-half recovery due to the uncertain duration of the outbreak, said Ling, adding that OCBC will keep its GDP growth forecast for this year at 0-1 per cent.