Fitch Ratings, in its latest assessment of Singapore’s economy, notes that Singapore’s economy will still be among those most affected by coronavirus outbreak, despite budget measures.
Key quotes:
Fiscal space facilitates Singapore’s use of stimulus measures.
Despite increased deficit, Singapore govt will still meet its rule of maintaining a balanced budget over course of single parliamentary term.
New budget will widen Singapore’s overall central government deficit to 2.1% of GDP in FY20 from about 0.3% in FY19.
Believes that Singapore’s 2020 economic growth is now likely to be closer to 0.6%.
Singapore’s economy will still be among those most affected by coronavirus outbreak, despite budget measures.
Singapore’s public finances remain on sound footing and govt's conservative approach to management of public finances provides support to rating.
Public health concerns will dampen consumer and business sentiment within Singapore.
Singapore’s Finance Minister Heng said on Wednesday that the Singapore dollar (SGD) exchange rate has sufficient band to move as appropriate.
His comments came a day after a 5.6 billion Singapore dollars ($4.02 billion) budget was announced for 2020 to help businesses and households tide through the ongoing coronavirus outbreak.
FX implications:
The Singapore dollar caught a fresh selling-wave on the PBOC rate, driving USD/SGD to the highest levels since May 2017 at 1.4082.
At the press time, the pair has corrected from multi-month highs and trades near 1.4020, still up 0.56% on the day.
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