Singapore extends $5.8 billion stimulus to cushion blow from pandemic

Singapore Deputy Prime Minister Heng Swee Keat announced additional support measures of S$8 billion ($5.8 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 Monday. 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 has fallen 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 per cent on an annualized basis in the second quarter 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 per cent stronger on the day at 1.3702 to the US dollar as of 4:15 p.m. in Singapore.

Export figures released Monday showed tentative signs of recovery in July, with non-oil domestic shipments jumping 6 per cent from the same time last year, beating estimates for a second straight month.Other measures announced Monday include:S$1 billion to 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 per cent for those 40 or older

S$320 million in credits to boost domestic tourism; MTI will provide details next month

As much as S$150 million to expand aid for start-up firms, including capital grant and mentorship opportunities