SINGAPORE (Dow Jones)--The Singapore government is considering a second stimulus package worth around S$10 billion after the economy suffered its worst contraction on record in the first quarter, a person familiar with the situation said Tuesday.
"The GDP numbers are much worse than expected. There are thoughts of another stimulus (package) but no firm decision yet," the person told Dow Jones Newswires. There is no timeline on when a decision might come, the person said, adding, "It may not happen."
Asked about the size of any supplementary package, the person said it could be "close to half" that of a S$20.5 billion package announced in January. If the government compiles an extra budget, it would likely draw on the nation's reserves again to finance the package, the person said.
The Finance Ministry had no immediate comment.
Singapore's gross domestic product plunged at an unexpectedly sharp annualized rate of 19.7% in the first three months of the year from the previous quarter, the government said Tuesday, the worst since the government began compiling comparable data in 1976.
It now expects the economy to shrink between 6% and 9% this year, far worse than the 2.4% contraction of 2001, the biggest drop since the island became independent in 1965. The government had previously forecast a full-year contraction of between 2% and 5%.
In February, Finance Minister Tharman Shanmugaratnam told the parliament that the government might have to dip into its reserves again if economic conditions deteriorate more than it has anticipated.
"We may have to make more moves (to dip into the nation's reserves) in future," Tharman said at the time.
-By Costas Paris, Dow Jones Newswires; 65 6415 4153; [email protected]
"The GDP numbers are much worse than expected. There are thoughts of another stimulus (package) but no firm decision yet," the person told Dow Jones Newswires. There is no timeline on when a decision might come, the person said, adding, "It may not happen."
Asked about the size of any supplementary package, the person said it could be "close to half" that of a S$20.5 billion package announced in January. If the government compiles an extra budget, it would likely draw on the nation's reserves again to finance the package, the person said.
The Finance Ministry had no immediate comment.
Singapore's gross domestic product plunged at an unexpectedly sharp annualized rate of 19.7% in the first three months of the year from the previous quarter, the government said Tuesday, the worst since the government began compiling comparable data in 1976.
It now expects the economy to shrink between 6% and 9% this year, far worse than the 2.4% contraction of 2001, the biggest drop since the island became independent in 1965. The government had previously forecast a full-year contraction of between 2% and 5%.
In February, Finance Minister Tharman Shanmugaratnam told the parliament that the government might have to dip into its reserves again if economic conditions deteriorate more than it has anticipated.
"We may have to make more moves (to dip into the nation's reserves) in future," Tharman said at the time.
-By Costas Paris, Dow Jones Newswires; 65 6415 4153; [email protected]
