SINGAPORE (Reuters) – Singapore’s prime minister said on Thursday the government would ensure that national carrier Singapore Airlines (SIA) <SIAL.SI> survives the COVID-19 crisis, but warned that the economy would have to open up slowly and some jobs would disappear forever.
“SIA has always flown Singapore’s flag high all over the world and made us proud. We will spare no effort to enable it to do so again,” Lee Hsien Loong said in his May Day speech.
In late March, state investor Temasek Holdings and others put together a funding package of up to S$19 billion ($13.5 billion) for the airline, which has been slammed by the coronavirus pandemic.
Singapore is facing the deepest recession in its 55-year history, and authorities have warned that unemployment is likely to rise and wages drop.
The city-state has among the highest number of infections in Asia due to mass outbreaks in cramped migrant worker dormitories. It has extended widespread curbs to contain the spread of the virus, which include the closure of most workplaces and schools until June 1.
Authorities will ease curbs and progressively restart the economy once the number of cases come down, Lee said.
“We have kept essential services going. But the rest of the economy will have to open up step by step, and not all at once,” Lee added.
He said industries such as those critical to the domestic economy will open up earlier and recover sooner. But others that attract crowds such as entertainment outlets and large-scale sporting events will have to wait.
The virus has hit Singapore’s bellwether trade-reliant economy hard. The government’s 2020 forecast for GDP is –4% to –1%, but the central bank has warned that risks of a sharper contraction are growing.
Lee said the pandemic would cause significant structural changes to the Singapore economy, which is among the most open in the world. He said the movement of goods and people will be less free.
“Companies will have to change their business models to survive. Some jobs will simply disappear,” he said.
(Reporting by Aradhana Aravindan in Singapore; Editing by Gareth Jones, William Maclean)