Singapore (AsiaNews/Agencies) – Singapore has unveiled an economic stimulus plan worth S$48 billion (US$33.7 billion) to counter the economic fallout of the coronavirus pandemic. This follows the S$6.4 billion (US$4.5 billion) announced in February to deal with the COVID-19 crisis.
Major think tanks expect world GDP to contract in the first two quarters of 2020, followed by a slow economic recovery in the second half of the year.
In the first quarter of this year, Singapore's economy shrunk by 2.2 per cent over the same period last year. Now the island nation plans to draw S$17 billion (US$12 billion) from its national reserves, estimated at around US$1 trillion,
The last time Singapore tapped its reserves was in 2009, during the US subprime crisis, when it drew S$4 billion (US$2.8 billion).
As part of its action, the government will offset up to 50 per cent of wages in the food services sector, whilst the aviation and tourism sectors will receive up to 75 per cent in co-funding.
With today’s announcement, Singapore has the biggest support package in the region, and it is not alone.
In Thailand, the government approved a US$12.7 billion plan. South Korea already unveiled measures worth some US$9.8 billion, Indonesia announced a US$8.1 billion target, and Vietnam wants to spend US$1.16 billion, whilst Malaysia will make public its plan in the coming days.
Among the bigger players, Japan is considering a ¥30 trillion (US$270 billion) economic stimulus to boost spending. In 2008-2009 crisis, it injected ¥15 trillion (US$135 billion).
So far China injected trillions into the financial system, but has not unveiled a targeted economic plan.
In February, it announced huge spending in infrastructure investment to jumpstart the economy. The new spending will be backed by as much as RMB¥ 2.8 trillion (US$394 billion) of special local government bonds.
In 2008, in the middle of the subprime crisis, Beijing responded with an RMB¥4 trillion (US$586 billion) stimulus package, which overheated the Chinese economy, increasing the level of indebtedness of local governments.
