Coronavirus News Asia

Singapore’s guarded reopening risks viral revival


SINGAPORE – Faced with contracting growth and the worst recession in its history, Singapore is preparing to gradually reopen its economy as it struggles to contain a Covid-19 outbreak that has rapidly spread among foreign workers, resulting in the highest per capita infection rate in Asia.

The city-state’s Ministry of Trade and Industry (MTI) on Tuesday (May 26) downgraded its full-year growth forecast for 2020 to between -4% and -7%, down from an initial projection of -1% to -4% in March. MTI cited deep uncertainties in the global economy and risks of subsequent waves of infections in major economies as reasons for its revised outlook

Deputy Prime Minister Heng Swee Keat shortly after unveiled an unprecedented fourth budget, dubbed the “Fortitude Budget”, containing various measures to bolster job creation and support affected workers and businesses that will be unable to immediately open as Singapore begins a three-phase plan to lift virus-curbing restrictions from June 2.   

The city-state’s strategic national reserves will be drawn upon to fund the additional S$33 billion (US$23.2 billion) spending package. Singapore has thus far committed S$92.9 billion ($65.4 billion) – equivalent to around 20% of annual economic output – to stoke its economy since the beginning of this year.

“This is really about the hit to the economy likely being longer, and about creating job opportunities in an environment where there is a lot more uncertainty about how the shape of the recovery is going to unfold. It is necessitated by the severity of the downturn,” said Song Seng Wun, an economist with CIMB Private Bank.

“The risk of a further downward revision is certainly there,” he added. “Much really depends on the next three to six months and to what extent global confidence returns as small businesses switch on their lights or whether the need for safety distancing rules becomes even more important in the event of a second or third wave of infection.”

Singapore’s usually bustling business district was almost deserted on April 7 as most workplaces in the city-state closed to stem the spread of the coronavirus after a surge in cases. Photo: AFP/Roslan Rahman

Coronavirus infections in Singapore have sharply risen since April with clusters at foreign worker dormitories accounting for more than 90% of total cases. Hundreds of new dormitory infections continue to be reported daily, while cases among citizens and permanent residents in the wider community are often in single digits.

The low rate of transmission outside the worker dormitories has paved the way for Singapore to ease its restrictive “circuit breaker” measures introduced in early April. But the formal expiry of the partial lockdown won’t entail a return to business as usual as the wealthy city-state intends to reopen its economy over several months.

With an effective vaccine or treatment for coronavirus not yet in sight, authorities have opted to phase in a “new normal” where most activities can eventually resume within safe limitations. But as a third of the labor force resumes work from next week, the government also anticipates a rise in new coronavirus cases.

“We do expect that … as some of the circuit breaker measures are rolled back or relaxed, we will likely to see the number of cases in the community go up,” said Health Minister Gan Kim Yong at a press conference earlier this month. Stricter measures may also be reintroduced to “suppress the number of cases” if a large infection cluster emerges, he added.


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