Singapore sets aside over $8 billion in 2021 budget for new Covid support package

The Singapore government on Tuesday announced a new fiscal package worth 11 billion Singapore dollars ($8.3 billion) to support Covid vaccination efforts and economic segments hit hard in the pandemic. Finance Minister Heng Swee Keat, in his annual budget speech, outlined how the funds will be used:

About 4.8 billion Singapore dollars ($3.6 billion) are meant for public health and safe reopening measures, including vaccination, contract tracing and testing capabilities. Extend several existing schemes to subsidize wages of workers and provide financing to businesses. Targeted support for select sectors such as aviation, land transportation and arts. Singapore’s government last year committed more than 90 billion Singapore dollars ($68 billion) — around 20% of GDP — to soften the pandemic’s economic hit.

Those measures, along with the central bank’s monetary support, helped Singapore to “avoid a worse recession, avert job losses and mitigate inequality,” said Heng. He added that if not for the measures, the Southeast Asian economy would have shrunk by at least 12.4% last year. That’s more than double the 5.4% contraction — still the worst-ever economic recession — that the country recorded in 2020. Singapore’s economy is expected to grow 4% to 6% this year, according to the government’s forecast.

The latest Covid support package is part of Singapore’s government budget for the coming financial year starting April. Overall, the city-state’s government is expected to record a deficit of 11 billion Singapore dollars ($8.3 billion) or 2.2% of GDP — an unusual occurrence for the first budget of a new term of government. Singapore’s constitution requires the government’s revenue and expenditure to be balanced over a typical five-year term. In the last few electoral cycles, the government accumulated surpluses early in its term — which allowed it to fund bigger budgets later.

Singapore sets aside over $8 billion in 2021 budget for new Covid support package, CNBC, Feb 16