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The coronavirus crisis has continued to deteriorate. Not only are new infections rising exponentially, so is the panic induced. As a result, governments are rolling out massive stimulus policies at a stunning pace. The question then is what net effect these trends will have on the duration and impact of the crisis.

Climate scientists tell us that climate change will not only bring about rising sea levels and more extreme weather events, it also increases the likelihood of epidemics. But despite the clear linkage between the two, our response to the current Covid-19 pandemic is almost completely opposite to our usual response to climate change.

The daily number of new cases of confirmed Covid-19 infection in China has dropped sharply in the last few weeks – from more than 15,000 on February 12 to just 99 on Friday. Many Chinese provinces and cities have for days, even weeks, reported no daily increase in confirmed infections.

The Covid-19 crisis has turned out to be far worse than we thought only a month ago. It has spread further and is now a global crisis – not just a mainly Chinese one. With the virus causing dislocations in major economic centres such as South Korea, northern Italy and now the United States, Asian economies will suffer from a broader drop in overall global demand.

Finance Minister Heng Swee Keat had to shape the 2020 budget under difficult circumstances. The COVID-19 crisis was a black swan event that no one could have foreseen. It forced policy makers to sharply rethink their basic assumptions for the budget and refocus fiscal priorities at the very last minute.