With the ongoing coronavirus outbreak threatening to stall economic growth, Singapore’s government could roll out one of its biggest budgets yet to soften the hit to its economy.
The country’s finance minister, Heng Swee Keat, is scheduled to deliver his annual budget speech on Tuesday. That’s coming as the country grapples with one of the highest numbers of confirmed coronavirus cases outside China.
“The recent virus outbreak has added salt to the wound,” said Irvin Seah, senior economist at Singapore bank DBS.
He explained in a note earlier this month that the current outbreak could have a “deeper” impact on Singapore compared to the SARS epidemic in 2003. That’s because the country has since increased its economic links with China, which is now Singapore’s largest export market and biggest source of international tourists.
An expected slowdown in Chinese demand and domestic consumption in Singapore because of the virus spread are among the reasons why Seah lowered his forecast for Singapore’s annual growth this year to 0.9% from 1.4% previously.
In 2019, the Southeast Asian economy grew 0.7% — the slowest annual pace since 2009, according to official data.
To cushion the economic blows from the virus outbreak, Seah and other economists said the Singapore government will likely register one of its largest fiscal deficits on record this year — with estimates ranging from 7 billion Singapore dollars ($5.04 billion) to 8 billion Singapore dollars.
Reference: CNBC
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