PM Lee Hsien Loong doesn’t rule out recession as coronavirus outbreak hits economy hard

Unions will try to minimise retrenchments and businesses could get help with cash flow

Prime Minister Lee Hsien Loong and Senior Minister of State for Transport and Health Lam Pin Min visiting baggage handling workers at Changi Airport Terminal 3 yesterday. PM Lee said the economic impact of the virus outbreak, particularly in the next
Prime Minister Lee Hsien Loong and Senior Minister of State for Transport and Health Lam Pin Min visiting baggage handling workers at Changi Airport Terminal 3 yesterday. PM Lee said the economic impact of the virus outbreak, particularly in the next few quarters, would be significant.ST PHOTO: KUA CHEE SIONG

The possibility of a recession looms over Singapore, said Prime Minister Lee Hsien Loong, noting that the coronavirus outbreak has already hit the economy more severely than the severe acute respiratory syndrome (Sars) epidemic did in 2003.

"I can't say whether we will have a recession or not. It is possible, but definitely our economy will take a hit," he told reporters yesterday during a visit to Changi Airport Terminal 3.

The impact, particularly in the next few quarters, will be significant as the country battles a "very intense outbreak", he said.

"It is already much more than Sars, and the economies of the region are much more interlinked together. China, particularly, is a much bigger factor in the region," he added.

Singapore was hit by Sars in March 2003. It took five months, until July, to eradicate the disease here.

"That was, I think, very fast. I expect it not to be so fast this time," he said.

Singapore is working to contain the coronavirus disease, Covid-19, which was first reported in the Chinese city of Wuhan in December last year. But the Government is already bracing itself for tourist arrivals to drop by between 25 per cent and 30 per cent this year.

Some of the impact was already evident when PM Lee visited Changi Airport, which is on the front lines of the fight, and spoke to workers, businesses and cabbies there.

One taxi driver told PM Lee that his income was down by 30 per cent.

While flights are down by a third, and businesses hit hard, staff and crew have to stay at their posts and keep Singapore open for business, PM Lee said.

"We have to get through this, and I think, with the unions' help, we will," he told one group of workers.

 
 
 

Shutting down the country was not an option, he said.

"We have to keep Singapore going and we have to keep making a living. Life has to go on. So, we have to calibrate and judge as we (take) each step, what is the most prudent thing to do," added PM Lee, who was accompanied by Mrs Lee and Senior Minister of State for Health and Transport Lam Pin Min during his 11/2-hour visit.

Other ministers have also called on Singaporeans to rally together during this time of crisis.

Defence Minister Ng Eng Hen said in his Total Defence Day message yesterday: "The Government will work with companies and unions to ensure that retrenchments are kept to a minimum, if at all."

Trade and Industry Minister Chan Chun Sing met several business leaders and said that while many small and medium-sized enterprises were worried about cashflow problems during the current crunch, Tuesday's Budget would seek to address some of these issues.

He also said that the outbreak highlighted that businesses should not just diversify their supply chains, but also ensure they did not have too many workers from any one country.

Meanwhile, PM Lee told reporters that Singapore was working with its neighbours to strengthen cooperation in dealing with the virus.

 

The authorities in both Singapore and Malaysia had announced a joint working group to deal with the virus this week.

Vietnam, as the current chairman of Asean, is also coordinating a regionwide response and will issue a statement soon.

PM Lee said: "We do need to exchange information and cooperate with one another to avoid working at cross purposes... because for us in Singapore, if the region has a problem, it is going to be very, very difficult for Singapore to isolate itself and keep the problem outside of our boundaries."

 
A version of this article appeared in the print edition of The Straits Times on February 15, 2020, with the headline 'PM Lee doesn't rule out recession as outbreak hits economy hard'. Print Edition | Subscribe