Business and households that have been hit by the ongoing coronavirus outbreak in Singapore will be helped by the government which has set aside a total of 5.6 billion Singapore dollars or $4.02 billion in reserves for the purpose for the coming year.
This was announced by authorities in Singapore on Tuesday.
The highest numbers of coronavirus cases – which is now officially known as Covid-19, outside of Mainland China have been reported from this Southeast Asian country. According to data revealed by Singapore’s Ministry of Health, there were a total of 77 confirmed cases of the viral infection in the country as of Monday while 24 of the infected have been already cured and discharged from hospitals.
“The outbreak will certainly impact our economy,” said Heng Swee Keat, Singapore’s deputy prime minister and finance minister, while delivering a speech outlining the budget of the country.
Additionally, the government will also push back a planned hike in the goods and services tax, Heng said. The plan of the Singapore government was to raise the GST from the current rate of 7 per cent to 9 per cent in phases between 2021 and 2025.
Further, in order to financially support the fight against the virus, the government also announced a separate fund of 800 million Singapore dollars, the minister also said. The majority of that amount would be given out to the ministry of health of the country.
2019 was not a very good year for Singapore’s economy and therefore this novel coronavuris outbreak is an added challenge for the government in Singapore. Throughout of 2019, the major hurdle for the economy of Singapore was the trade war between the United States and China – the tow largest economies of the world, and because the economy of Singapore is primarily export dependent. The US-China trade war had dampened global demand thereby hitting exports of Singapore – including that of demand for semiconductors which is the most important export product of the country.
Reflecting the concerns that the coronavirus outbreak could have on the economy of the country for the current year, the forecast range for the growth in the gross domestic product for 2020 was brought down by Singapore’s Ministry of Trade and Industry on Monday. The government now expect its GDP to grow at between -0.5 per cent and 1.5 per cent for the current year. The previous estimates were put at between 0.5 per cent and 2.5 per cent.
According to official data, the 2019 economic growth for the economy was at 0.7 per cent which was the slowest rate of growth for the economy since 2009.
“The recent virus outbreak has added salt to the wound,” said Irvin Seah, senior economist at Singapore bank DBS.
Compared to the SARS epidemic in 2003, the current outbreak of the coronavirus could have a “deeper” impact on Singapore, Seah said in a note to clients earlier this month. This is because of the deepening of the economic relations between Singapore and China since 2003 and China is now the largest export market of Singapore. China is also te largest source of tourists to the country.
(Adapted from CNBC.com)