The Government has come up a generous budget consisting of rebates, bridging loans and cash payouts to help Singaporeans and businesses during this uncertain times. This Budget is also seen by many as a sweetener for the election-year budget, which is anticipated to be in 2020. We did a GE comparison of the 2015 vs 2020 budget (table below) for your reference.
With the COVID-19 outbreak expected to have a much greater impact than the 2003 SARS pandemic, will these measures be enough?
While Singapore managed to recover strongly following the SARS outbreak to expand 4.5% in 2003. The economy still shrank sharply by 4.2% yoy during the April-June quarter (Singapore’s first case of SARS was detected in March 2003, with the outbreak being contained by May 2003). The world is also a much different place compared to 2003.
Prior to the outbreak, China is struggling with its lowest economic growth in 30 years as the world’s second largest economy expanded only 6.1% in 2019. This is compared to 2003 where the Chinese economic system is growing at a rapid 9.1%, a 7-year high. China’s economic influence over the world and Singapore has also risen significantly since 2003 from 4% of global GDP to about 20%. China is also currently Singapore’s largest non-oil export destination, at 17.3% of the Singapore’s overall exports.
The generous budget is well-received and will provide some relief to Singaporeans and businesses, nonetheless it is expected to be a uphill road ahead for some industries in MICE, Aviation and Tourism.
Can the smaller players survive this phase?
Have faith and walk the miles!