SINGAPORE – Singapore on Monday added another $8 billion ($5.8 billion) to businesses and citizens after the city-state economy hit its worst quarter recorded : a 13.2% contraction during the year in the 3 months to June.
Gross domestic product is expected to decline by 5% to 7% year-round, and the government is rushing to consolidate the most vulnerable sectors as the coronavirus pandemic leaves a series of company closures and job losses in its wake.
Finance Minister and Deputy Prime Minister Heng Swee Keat has made aviation, aerospace and tourism the maximum spaces in need of assistance, pronouncing the extension of wage subsidies for these industries until next March.
“These sectors are portions of our economy and are multipliers for other sectors,” he said in a televised speech. “In particular, Singapore’s position as a global shopping mall is based on our connectivity as an air hub.”
The 3 sectors are expected to get 50% clearing bills. The structure will get 50% of the bills in September and October, before it falls to 30% from November to March. Other heavily affected segments, such as retail, catering and the arts, will get 30% compensation.
“Seven more months are quite beneficial and corporations will suffer at this difficult time,” said Selena Ling, head of studies and treasury strategy at OCBC Bank, in a note. “Hopefully, by March 2021, it may be clearer that things are changing, especially if a vaccine has been discovered and more economic activity has been normalized.”
This is in addition to the more than SG$90 billion already contributed in 4 rounds of stimulus. The finance minister unveiled the new plans about a month after his ruling People’s Action Party won a general election in which the opposition made unprecedented progress. During the campaign, the PAP had brought Singapore out of the COVID-19 crisis as a key component of its platform.
The tension to deliver on promises increases after the publication of the GDP figures for the quarter of the moment. The slide into recession coincided with a week-old economic closure involving coronavirus transmissions.
“Regardless of your situation, the government will help you get out of this crisis,” Heng said Monday. “Together, we will have to continue to adapt to the conversion situation. We have designed our measures to give us the flexibility to adapt as the crisis progresses.
In the aviation sector, a further S$187 million has been earmarked to reduce prices for airlines, floor operators, transport agents and airport renters. Businesses in the sector are suffering to stay afloat under widespread border restrictions: the city-state border with neighboring Malaysia partially reopened on Monday.
To bring tourism to life, SG $320 million will be used for what the government calls SingaporeRediscovers coupons: credits that citizens can use to explore their small hometown.
In developing sectors such as biomedical sciences and monetary services, the government is also launching a $1 billion program for companies to rent local skills over the next six months.
You’ll pay up to 25% of the salaries of all new recruits in Singapore for a year, subject to a limit. For staff aged 40 and over, the moderator price ticket formula will be greater than 50%. Heng said the Ministry of Labour will provide more main points on the initiative by the end of August.
“It’s a complicated journey, but you probably wouldn’t walk alone,” Heng says in Singapore. “We have the capacity to recover to succeed in demanding situations, turn demanding situations into opportunities, and prepare for the future.”
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