How Singapore is fighting the virus

02:46, 26 March 2020

More and more countries follow the American example and appeal to the State Reserve

Besides China, the first epicenter of the disaster, Singapore was one of the first countries to report cases of infection with Covid-19, alongside Taiwan, the Philippines, Thailand, and Vietnam.  As we speak, the country has 631 cases, with two deaths.  

Market Situation

As it happened with markets all over the world, Singapore stocks had a rapid fall. The benchmark Straits Times Index (STI) had one of the most shocking drops since Oct 2008, closing down at 7.4% on March 23. 

"In this outbreak, STI is down twice as much," Phillip Securities head of research Paul Chew said. "This, as the outbreak has turned global, in comparison with SARS, which was confined within the Asia region."

Due to stimulus, the USD/SGD is expected to move higher, say market analysts.

Economic Situation

Thursday, a stimulus package was announced to fight against the Coronavirus fallout. Like the US stimulus package, this means to protect the jobs, support businesses, and help the local economy. The government already took such measures in February ($4.4 Billion), but given the current situation, it has been decided that another $33.6 Billion is necessary. Overall, this stimulus package represents 11% of Singapore's GDP.

"This is a landmark package and necessary response to a unique situation," Heng Swee Keat, Singapore's deputy prime minister, and finance minister, said in a speech in parliament on Thursday.

This is the second time when Singapore is using its state reserves. They did so only during the 2009 financial crisis when $3.4Billion was used.

Besides the Corona crisis, economists are expecting a year-over-year contraction of 1.5% for the economy.

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