Singapore Economic Stimulus Package
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A record Singapore economic stimulus package of $13.7 billion has been unveiled to provide a safety cordon for worst recession in recent years. According to their finance minister Tharman Shanmugaratnam primary objective of economic stimulus package in Singapore is to save jobs and prevent unemployment rate from going beyond the current rate of 2.2%. A sharp increase in unemployment might lead to political unrest against People’s Action Party, which would be celebrating its 50th anniversary of being in governmental power.
Singapore known for its thrifty nature has a rare budget deficit of $5.8 billion this year. Amounting to roughly 6 percent of its gross domestic product (GDP), this deficit would be financed by Singapore government’s reserves of $300 billion. This particular financial aid has been likened to a economic stimulus package of Singapore. Economic growth is expected at a modest 5 percent for 2009 and could be heralded, to a significant extent by economic stimulus package for Singapore.
To prevent unemployment from increasing and encourage hiring, corporate tax has been reduced by one percent for 2009. Investments in infrastructure have been planned to create new job opportunities. Subsidies and tax rebates have been planned for income earners and households. A substantial economic stimulus package to Singapore would also be needed in order to supplement these measures.
Singapore being an open economy in Asia is susceptible to global economic changes. Exports, which are main revenue earner of Singapore, have received a substantial setback due to international fall in demand. Consumer spending has been curbed by introducing a forced savings option into state operated pension fund. According to Credit Suisse, greatest impact of this recession would fall on about 200,000 overseas workers who would have their work permits exhausted by 2010.
In 2009, needy families would be provided a support amounting to $1.7 billion in form of tax rebates and cash handouts. Following few years would be most trying for Singapore economy stimulus packages.
