Singapore has set aside another 48 billion Singapore dollars ($33.17 billion) to support its businesses and households after official preliminary estimates showed the Southeast Asian economy shrinking by more than expected in the first quarter of this year.
The additional spending on stimulus came just a month after the country announced 6.4 billion Singapore dollars ($4.4 billion) of economic and health-care measures to tide through the ongoing coronavirus pandemic. Together, the two support packages account for around 11% of Singapore's gross domestic product.
"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.
To fund the new measures, Heng said the government will draw up to 17 billion Singapore dollars ($11.78 billion) from the country's reserves. Singapore's President Halimah Yacob, in a written message read out by the speaker of parliament, said she has given her in-principle approval for the use of reserves.
The exact amount of Singapore's reserves is a state secret, but various estimates have placed it at hundreds of billions in U.S. dollars.
This is only the second time that Singapore has dipped into its reserves. The first time it did so was in 2009, during the global financial crisis, when the government drew 4.9 billion Singapore dollars ($3.40 billion).
The new measures announced by Heng include wage subsidies to help businesses keep their workers, deferment in income tax payments for companies and self-employed persons, as well as cash payouts to Singaporeans.
Heng also introduced additional support for specific sectors that have been badly hit by the coronavirus outbreak, including the aviation, tourism, land transport and arts and culture industries.
The aviation sector will get 350 million Singapore dollars ($243.26 million) of additional support, while flag carrier Singapore Airlines will be announcing a "corporate action" with support from state investment firm Temasek Holdings, the minister added.
Singapore Airlines cut its passenger capacity by 96% until the end of April. Trading of the airline's shares on the Singapore Exchange was halted on Thursday, pending an announcement.
Singapore was one of the earliest outside China to report cases of the disease, which has been formally named COVID-19. The country recorded its largest daily jump of 73 confirmed cases on Wednesday, bringing its total to 631, including two deaths.
Before the stimulus announcement, Singapore released preliminary estimates of its first-quarter economic performance. The country is one of the first to release data on gross domestic product, providing a glimpse of how the virus outbreak could affect the global economy.
Singapore's economy contracted by 2.2% year-over-year and 10.6% quarter-over-quarter in the first quarter, said the Ministry of Trade and Industry. The year-over-year contraction was the deepest Singapore has recorded of 2009 during the global financial crisis.
Economists polled by Reuters had expected the Southeast Asian economy to contract by 1.5% year-over-year and 6.3% quarter-over-quarter.