Singapore unveils US$4.6 billion economic boost in budget to battle coronavirus outbreak

The funds will go towards health care and helping businesses and households, with the country set to post its biggest budget deficit since 1997

The mix of sweeteners and financial support suggests a general election is on the cards for 2020 despite the gloom caused by the virus, says one analyst

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Sectors directly affected by the virus outbreak – such as tourism, aviation and retail – will also receive targeted help in Singapore’s budget. Photo: EPA

Published: 5:18pm, 18 Feb 2020Updated: 2:54pm, 25 Feb 2020

Singapore on Tuesday presented financial measures worth S$6.4 billion (US$4.6 billion) to help its economy cope with the impact of the coronavirus outbreak, setting it on the path for its biggest budget deficit since 1997.

The measures comprise a S$800 million health care package, S$4 billion for businesses and workers, and another S$1.6 billion going toward households to tide them over. The deficit will be 2.1 per cent of GDP in the coming financial year, up from 0.3 per cent in the current financial year.

“Just as the global economy was beginning to recover, the coronavirus … outbreak hit us,” said Finance Minister Heng Swee Keat during his budget speech that ran for over two hours.

“The outbreak will certainly impact our economy … Our first concern is to protect you and your families.”

Singapore’s Finance Minister Heng Swee Keat. Photo: Reuters

Until the virus outbreak escalated last month, all eyes had been on whether the 2020 budget would be filled with relief measures since a general election is expected to take place this year, though Singapore has until April 2021 to go to the polls.

Analysts on Tuesday said while the budget largely focused on combating the economic fallout from the virus, it was full of sweeteners, with DBS Bank senior economist Irvin Seah calling it “an extraordinary budget in an exceptionally challenging period”.