Long and rocky road to year-end recovery

Singapore

SINGAPORE'S economy could be back in pre-pandemic business by year-end if vaccination targets are met, watchers have told The Business Times, after policymakers on Friday promised to unveil a broader reopening roadmap "in due course".

The Republic is prepared to ease its domestic and border controls when the share of the population fully vaccinated against Covid-19 hits 50 per cent, and then 75 per cent.

"The assurance is, as we get our vaccination rates higher, we will be able to confidently reopen - not just within Singapore but also at our borders - and do so safely," said Finance Minister Lawrence Wong, one co-chair of the national Covid-19 taskforce. That's as higher-risk sectors, which were shuttered during the just-ended Phase 2 (Heightened Alert), are also set to resume operations by an unspecified date in mid-July.

Eateries can offer dine-in services to groups of up to two from June 21, with the cap rising to five in mid-July - though the Ministry of Health added in a press release that the liberalisation depends on "barring another super-spreader event or big cluster". Similarly, gyms and fitness studios can resume unmasked indoor activities for groups of up to two from next week, rising to five in mid-July.

"Even a cautious and two-staged reopening is better than nothing, so both the operators of these businesses and the consumers would welcome the move," OCBC chief economist Selena Ling told BT.

Beyond the latest easing of restrictions, observers are hoping for a return to pre-pandemic lifestyles when vaccination thresholds are reached. Though DBS senior economist Irvin Seah noted that "the economy has been chugging along even without contributions from the travel industry", he stressed that the sector's reopening will benefit shuttered businesses and struggling workers.

Maybank Kim Eng senior economist Chua Hak Bin expects the 50 per cent mark to be crossed in the third quarter, which could boost the food and beverage (F&B) and recreation service industries, while "hospitality, air travel and retail will take off in Q4 when border controls are relaxed". Ms Ling agreed that the economic recovery could resume in Q3, adding: "Should vaccination progress be deemed sufficient to allow overseas travel to resume, then we could see something approaching normalcy."

Slightly over 35 per cent of Singapore's population has been fully vaccinated against Covid-19, and 49 per cent have received at least one dose of the two-shot vaccines now in use.

To be sure, Health Minister Ong Ye Kung, another taskforce co-chair, remarked that Singapore cannot peg its exit plan to economies such as the United States of Europe, where earlier outbreaks led to higher local immunity.

Yet the reopening in those regions shows that social activities "can jump back to pre-pandemic levels very quickly once herd immunity is achieved", Dr Chua told BT. All the same, Ms Ling warned that normalcy "may be still some way off".

Indeed, staff in industries with unmasked or prolonged contact - such as food and beverage (F&B), gyms and personal care - will be placed on mandatory 14-day rapid testing regimes from mid-July on, either in supervised self-swabbing or at upcoming Quick Test Centres. The authorities also plan to implement SafeEntry Gateway Check-Out Boxes at high-footfall public venues, while testing for those who visited Covid-19 hot spots on the same days as confirmed cases will be compulsory, rather than optional as it is now.

Separately, the cost of business and social support is another issue on Singapore's long road to reopening. The level of Jobs Support Scheme (JSS) wage subsidies will be extended for three weeks from June 21, at 50 per cent for certain sectors that had to close, such as F&B and gyms, and 30 per cent for other affected sectors, such as retail and recreation. JSS support will then fall to 10 per cent for two more weeks, starting on July 12.

Rental waivers for stallholders at government-managed hawker centres also continue until mid-July.

But Mr Seah, who estimated that the latest round of restrictions shaved S$764.2 million off the Singapore economy, told BT that he is "concerned about the fiscal sustainability for Singapore in the long term".

Noting that the corresponding support package was indirectly funded by bonds meant for long-term infrastructure, he said: "We have set so many precedents in this Covid crisis. We tapped on the reserves so many times within a few months and to that magnitude, and now we are borrowing to spend on ad hoc expenditure.

"My question is: What next?"

READ MORE:

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