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Singapore isn’t expected to extend more virus aid until February’s budget, when the government is likely to provide targeted help to its weakest sectors, according to a senior official.
The city-state’s economy is expected to be stable but still weak next year, with uneven performance across sectors as industries like aviation and tourism continue to struggle, Education Minister Lawrence Wong said Thursday in an interview. The government is starting to plan for the budget and will be conducting consultations soon.
“We are already getting into budget 2021 very soon, so I don’t expect us to do anything between now and the budget,” Wong, who is also second minister for finance, said, adding that it’s unlikely for the economy to plunge into a tailspin as it did earlier in the year when the country entered into a partial lockdown.
“The economic outlook going into 2021 is going to be very different from the economic situation this year,” he said.
The government has pledged about S$100 billion ($74 billion) across five aid packages to stem the virus and its hit to the economy, about half of which can be funded from national reserves. Singapore has been reopening its economy and restarting more activities since a two-month so-called circuit-breaker lockdown that started in April was eased.
‘All Bets Are Off’
The central bank sees the economy contracting by 5% to 7% this year, as gross domestic product shrank 7% on-year in the third quarterand unemployment rose to its highest level since 2004.
“If something happens and we have to go into a circuit breaker, then again, all bets are off,” Wong, who also co-chairs a taskforce to fight the virus, added. “But we try our darndest not to get into that. We put in place different measures, and we would like to see us getting through 2021 relatively unscathed.”
The city-state, which has tallied more than 58,000 cases since the pandemic began, is constantly refining its approach to testing and contact tracing and has seen new daily cases dwindle with no cases in the community for the past nine days.
Already, the country has pushed ahead with a quarantine-free travel bubble with Hong Kong and is allowing events and conferences with as many as 250 participants. More measures to reopen an economy that’s highly dependent on trade and tourism are expected in the coming months as Singapore may enter the last phase of easing its virus restrictions by year-end.
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In a recent interview at the Bloomberg New Economy Forum, Prime Minister Lee Hsien Loong said he sees the government running a budget deficit at least through early 2021, and perhaps “a while” longer. Lee said returning to fiscal prudence and a balanced budget may take a while, with the government unlikely to have a surplus by the time of its next budget.
Wong said that while some sectors, like manufacturing, are already seeing signs of a pick up, those like aviation, travel and entertainment will remain “very weak” for quite some time.
“There will be unevenness across different sectors of the economy and our fiscal package, our budget, will take into consideration these sorts of unevenness in order to provide more focused and targeted support,” he said.
(Updates with economic daeta in sixth paragraph, virus-free days in eighth paragraph,)
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