Singapore's financial position weaker in coming years: Heng
Singapore
WITH almost S$100 billion set aside to combat Covid-19, Singapore's financial position will be "a lot weaker" in the coming years, and it will need to find ways to manage this "difficult financial situation", said Deputy Prime Minister and Finance Minister Heng Swee Keat.
But for now, the important thing is to keep people safe and to get the economy going again as much as possible, he said.
"It will not be easy. But if we put our minds to it, we can emerge stronger. And with that, I think we can begin to rebuild our resources over time," he added, in an interview with Channel NewsAsia on Wednesday.
This follows the unveiling of the unprecedented Fortitude Budget on Tuesday - Singapore's fourth Budget in less than four months. This fourth round of support measures amounted to S$33 billion, primarily targeted at helping workers and businesses tide over the crisis.
Together with the three other Budgets, total government support amounted to S$92.9 billion, about a fifth of Singapore's gross domestic product. Singapore faces its largest overall budget deficit since independence of S$74.3 billion, taking the total draw on past reserves up to S$52 billion this year.
When asked during the interview if there is a timeline to return the S$52 billion to the reserves, Mr Heng only pointed out that the amount that was taken from the reserves back in 2009 during the global financial crisis - about S$4 billion - was "a fraction" of the S$52 billion that Singapore is drawing this time.
The economy had also "rebounded very strongly" following the crisis, he added. The sum of S$4 billion was returned in 2011.
Drawing on past reserves is "very significant" this time as it is far larger at S$52 billion, with "extremely high" uncertainty ahead, he said. "I do not expect the global economy to recover quickly. Neither do I expect the Singapore economy to recover quickly. But our aim must be that we hope to recover faster and we aim to do our best to bring it as far as we can."
Mr Heng will address the issue of what the government will do to ensure that Singapore has fiscal power to keep it safe for the long term at a later date.
As for the outlook of the Singapore economy, he noted that it would depend very much on the global economy, which in turn depends on how well the world can control the pandemic. There is "huge uncertainty" on these issues - even as economies across the world gradually open up, it is "hard to say" when growth will return, he added.
The Ministry of Trade and Industry on Tuesday had downgraded its full-year GDP growth forecast to -7 to -4 per cent, worsening from an earlier -4 to -1 per cent.
On whether there could be a fifth supplementary Budget if the crisis continues, he said that there is a bigger contingent sum in the recent Fortitude Budget that allows the government to respond swiftly should the situation deteriorate.
"So, I hope that we do not need to have a fifth Budget in order to respond, because if the situation deteriorates, it is going to be very, very fast," he said.
The Fortitude Budget will be debated in Parliament on June 4.
