Specific Government's risk-sharing measures with businesses will depend on the nature and severity of an economic downturn

Date: 11 September 2012

To ask the Deputy Prime Minister and Minister for Finance: 

Whether the Ministry will consider implementing extraordinary financing measures like the Special Risk-Sharing Initiative (SRI) introduced as part of the resilience package launched during the financial crisis in 2008/2009 when the Government took up 80% of the risk share for the bridging loan programme, to help SMEs in the event that our economy goes into a tailspin; and (b) whether any plan has been drawn up.

Reply by DPM and Finance Minister Tharman Shanmugaratnam:

Mr. Teo Siong Seng asked if the Government will consider implementing extraordinary financing measures like the Special Risk-Sharing Initiative in the event that our economy goes into a tailspin.

While macroeconomic conditions remain sluggish, our economy continued to grow by 1.7 per cent on a year-on-year basis in the first half of 2012. Our credit market is still stable, and unemployment rate remains low. Barring unforeseen shocks, the Ministry of Trade and Industry^[1] expects the Singapore economy to grow by 1.5 to 2.5 per cent for the whole of 2012.

Nevertheless, we are monitoring the downside risks to Singapore’s economic and financial stability very closely. The Government stands ready to provide assistance to businesses and workers should there be a significant economic downturn. The specific measures and level of Government’s risk-sharing with businesses will be decided based on the nature and severity of any such downturn.

^[1] Revised GDP forecast will be released publicly in the week of 6 August 2012.