SINGAPORE: Immediate measures are necessary to stem the spread of COVID-19 and protect people's health, even if they do take a short-term toll on the economy, said Deputy Prime Minister Heng Swee Keat on Tuesday (Apr 14).
In the meantime, the Government should do what it can to soften the impact and help people and businesses to recover when the pandemic recedes, he said in a Facebook post on the International Monetary Fund’s (IMF) latest World Economic Outlook report.
The IMF, in its report, said the global economy is expected to contract by 3 per cent this year – a downturn much worse than during the global financial crisis in 2008 and 2009 – due to the COVID-19 pandemic.
If the pandemic fades in the second half and containment efforts can be gradually rolled back, the global economy may rebound by 5.8 per cent next year, said the IMF, although it cautioned “the risks for even more severe outcomes … are substantial”.
“Effective policies are essential to forestall the possibility of worse outcomes,” it added.
Mr Heng said he agreed with IMF's assessment.
“We must take immediate measures to slow the contagion and protect lives, and give full support to our healthcare system. While these will take a toll in the short term on the economy, these are important for the long-term health of our people.
“In the meantime, we should do what we can to cushion the impact on our people, our businesses, and help them recover when the pandemic recedes.”
Recalling his time as the managing director of the Monetary Authority of Singapore (MAS) during the 2008-2009 global financial crisis, Mr Heng said that the upcoming challenges will require "careful management".
“It was an extremely difficult time — so a contraction worse than that will need even more careful management,” he wrote.
In Singapore, nearly S$60 billion has been committed on the fiscal front to fight the pandemic, stabilise the economy and preserve jobs.
This comprises three support packages announced in less than two months - S$6.4 billion worth of relief measures as part of the Unity Budget on Feb 18, a record S$48 billion Resilience Budget on Mar 26 and a third round of support worth S$5.1 billion dubbed the Solidarity Budget on Apr 6.
READ: COVID-19 Resilience Budget: ‘Landmark’ S$48 billion package to tide Singapore through ‘unprecedented’ crisis
READ: COVID-19: Singapore makes 'decisive move' to close most workplaces and impose full home-based learning for schools, says PM Lee
The Government plans to draw a total of S$21 billion from past reserves to fund the Resilience and Solidarity Budgets. President Halimah Yaacob has given in-principle approval.
Singapore is also working with like-minded countries to keep supply lines open amid the disruption, said Mr Heng.
“We have braced ourselves,” he wrote.
“As the IMF emphasises, there is considerable uncertainty — so we hope for the best, and begin to prepare to emerge stronger from this crisis. But at the same time, we must be prepared for even rougher seas.
“We will continue to act decisively if the situation calls for it,” he said.