Singapore adds S$5.1 billion to stimulus, boosts handouts

Singapore increased its cash payout to individuals and announced additional steps to save lots of jobs as the city-state prepares to severely curtail activities to contain a spike in coronavirus cases.

The third virus-related stimulus package in 8 weeks will definitely cost S$5.1 billion ($3.6 billion), taking the nation’s total virus relief to almost S$60 billion, or 12% of gross domestic product, Deputy Prime Minister Heng Swee Keat said Monday in Parliament. The federal government will seek to draw a supplementary S$4 billion from past reserves, and can push up its budget deficit in today's fiscal year to 8.9% of GDP, he said.

Trade-reliant Singapore is reeling from the impact of the coronavirus outbreak, with the government predicting a 1%-4% contraction throughout the market this season. That’s even before new restrictions on movement get started Tuesday, like the closing of schools and non-essential businesses.

“The primary aim of this solidarity budget is to take further steps to save lots of jobs and protect the livelihoods of our people during this temporary period of heightened measures,” Heng said.

Singapore’s equity benchmark, the Straits Times Index, extended gains up to 3.7% after Heng announced the brand new stimulus package. The gauge was up 2.9% by 3:30 p.m.

The federal government already had requested to tap S$17 billion in past reserves because of its second stimulus package. President Halimah Yacob, in a Facebook post, said she gave her in-principle support to utilize the additional reserves.

A number of the new measures announced Monday:

*. An additional S$300 in cash handouts for all adult Singaporeans, bringing the full total per person to S$600

*. Wage subsidy for each and every local employee risen to 75% of gross monthly wages, for the first $4,600 of income paid this month

*. Foreign-worker levy waived for April

An accelerating virus caseload in recent weeks -- now increasingly made up of local clusters instead of Singaporeans returning from overseas -- culminated in the country’s most significant one-day total of confirmed cases Sunday, at 120.

The fresh stimulus was announced a week following the Monetary Authority of Singapore took unprecedented action to help ease policy, while commenting that fiscal policy would have to take the “primary role” in efforts to shore up the country’s economy.

Economic data have previously turned sour: February retail sales fell the most since last June and the city-state’s purchasing managers index plunged in March to its weakest level in 11 years.

Hard-hit industries, including tourism and food and beverage, have already been seeking support to handle new restrictions on eating dinner out. A coalition greater than 500 restaurants wrote Saturday to Prime Minister Lee Hsien Loong that the next month will be “do or die” for most outlets, requesting policies like rest from rent bills, the Straits Times reported.

Heng addressed the appeals for rental relief in Monday’s announcement, noting that legislation will be introduced this week to permit for deferral of contractual obligations, including rent payments, for an interval. The bill would make certain that a property-tax rebate announced earlier would filter to tenants, Heng said.

As coronavirus ravages the global economy, with all regions vulnerable, analysts have repeatedly downgraded estimates for world growth, with many seeing GDP growth near or below zero this season. Prospects for recovery have emerged as mixed, with an increase of economists projecting flatter economic activity for longer instead of the V-shaped rebound that was a popular wager early in the outbreak.