Fortitude Budget: Save and create jobs, be post Covid-19 ready

  • Fortitude Budget: Save and create jobs, be post Covid-19 ready Fortitude Budget: Save and create jobs, be post Covid-19 ready
Share: Share to Facebook Share to Twitter Share to LinkedIn


The Singapore government has tagged on a fourth round of fiscal support measures amounting to S$33 billion in the latest Fortitude Budget to further aid local businesses, preserve jobs and support households as well as fund frontline agencies in the fight against the coronavirus (COVID-19).

It comes on the heels of the earlier Unity, Resilience and Solidarity budgets which added up to S$59.9 billion or 12% of GDP for FY2020.

The new fiscal package raises the overall budget deficit to S$74.3 billion (15.4% of GDP), the largest in Singapore’s history. It will tap an additional S$31 billion from the national reserves estimated at S$424.8 billion as of April 2020.

A sizeable proportion of the Fortitude Budget will be used to extend job protection through co-payments that will not only help to retain but also retrain workers even as the current Circuit Breaker measures are eased under Phase 1 on 2 June 2020.

Measures in the fourth stimulus package include:

  • $23.5 billion in funds to support firms’ wages for up to 10 months
  • S$500 million to support businesses in their digital transformation
  • Extending foreign worker levy waiver and rebate for two more months for the construction, offshore and marine sectors
  • Grants to offset rental costs for smaller businesses
  • Expanding training programmes for first-time job seekers
  • Support for retraining of mid-career job seekers which include 6-month wage subsidies

The measures are certainly welcomed as Singapore will likely be mired in a recession with the Ministry of Trade and Industry (MTI) already downgrading the growth outlook this year to a range of -4.0% to -7.0%, down from -1.0% to -4.0% earlier. Resident unemployment had risen to 3.3% in March, the highest in a decade with more retrenchments looming in the months ahead.

The Fortitude Budget underscores the priority given not only to job preservation but also creation with the target of generating some 95,000 jobs in both public and private sectors with the set-up of an Emerging Stronger Taskforce to accelerate the process.

We view the latest budgetary measures as a clear, decisive and robust response to prepare Singapore for the challenges in the ‘new normal’ post-COVID-19 environment. As PM Lee Hsien Loong has duly noted, “We are in a strong position to overcome this crisis and emerge stronger.”

Beyond the pandemic, other clouds remain over the horizon, such as the new phase in US-China tensions in an increasingly de-globalised economic landscape. Any further disruption or clogging of global trade flows will definitely have headwinds impact on the Republic’s growth rate which we currently maintain at -4% for 2020.

This publication shall not be copied or disseminated, or relied upon by any person for whatever purpose. The informationherein is given on a general basis without obligation and is strictly for information only. This publication is not an offer,solicitation, recommendation or advice to buy or sell any investment product, including any collective investmentschemes or shares of companies mentioned within. Although every reasonable care has been taken to ensure theaccuracy and objectivity of the information contained in this publication, UOB Asset Management Ltd (“UOBAM”) andits employees shall not be held liable for any error, inaccuracy and/or omission, howsoever caused, or for any decisionor action taken based on views expressed or information in this publication. The information contained in this publication,including any data, projections and underlying assumptions are based upon certain assumptions, managementforecasts and analysis of information available and reflects prevailing conditions and our views as of the date of thispublication, all of which are subject to change at any time without notice. Please note that the graphs, charts, formulaeor other devices set out or referred to in this document cannot, in and of itself, be used to determine and will not assistany person in deciding which investment product to buy or sell, or when to buy or sell an investment product. UOBAMdoes not warrant the accuracy, adequacy, timeliness or completeness of the information herein for any particularpurpose, and expressly disclaims liability for any error, inaccuracy or omission. Any opinion, projection and otherforward-looking statement regarding future events or performance of, including but not limited to, countries, markets orcompanies is not necessarily indicative of, and may differ from actual events or results. Nothing in this publicationconstitutes accounting, legal, regulatory, tax or other advice. The information herein has no regard to the specificobjectives, financial situation and particular needs of any specific person. You may wish to seek advice from aprofessional or an independent financial adviser about the issues discussed herein or before investing in any investmentor insurance product. Should you choose not to seek such advice, you should consider carefully whether the investmentor insurance product in question is suitable for you.

Invest in your mind. Receive our curated insights in your inbox.