Lawrence Wong, Singapore’s then Deputy Prime Minister and Finance Minister, Speaking during the Milken Institute Asia Summit in Singapore, on sept. 13, 2023. WONG, Now the Country’s Prime Minister, is due to delivery the budget on Feb. 18.
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Singapore is gearing up for its first budget under Prime Minister Lawrence Wong, and Analysts are expecting more support for both households and businesses.
WONG, Who Took The Helm from Lee HSIEN LOONG IN MAY LAST Year, will deliver the budget on Feb. 18. The country is due for a general election by November.
In a video posted on his youtube channel On Tuesday, WOND SAID TACKLE IN Year’s Budget will “Tackle immediati concerns that all of you have raised about cost pressures, and also tackle longer-term challenges to ensure can In this Troubled World. “
In a Feb. 4 note, analysts from maybank noted that as singapore’s celebrates its 60th year of independence, the government is likely to roll out a generous “sg60 budget.”
Household and Business support
The Maybank Analysts Said Such a Budget will include a package of support measures for households to defeat costs, think as cash, consumption vouchers and rebates, more Ortunities for Workers to improve their skills through courses.
Bank of America Analysts Predict The Upcoming Budget will be a “feel-go” Ort Middle-ready and Middle-Income Groups May Be Possible, Given Signals in the New Year Day Message. “
In his New Year’s Day Message, WONG Said, “We will provide more targeted help to that who finder to copy, especially Older People and Lower-Income Groups. But we will not do not negative segments, incl -Eged, who are caring for Both Elderly Parents and Young Children. “
On the business front, maybank wind, there could be more rebates for corporate tax, as well as rebates on Property tax for commercials.
More enhancements to existing schemes to help companies may also be on the table, such as grants to relieve manpower costs.
The maybank analysts also noted that they do not expect on more property cooling measures or wealth taxes, noting that “significant hikes” to property and income taxes were implemented in 2022 and 2023.
“The government will probally wait to see whose increase in housing supply in the coming years will Cool Cool Prices,” Maybank Said.
Macroeconomic outlook
On the macroeconomic front, the bofa analysts said the budget is expected to be a “pro-road” budget, give the “low and stable” inflation and uncertain global outlook.
The Monetary Authority of Singapore Lowered Its 2025 Core Inflation Forecast Range To 1% -2% from 1.5-2.5% after the sharp decline to 1.9% in the fourth questioner (from 2.7% in the Third Quarter), Citing a Return to Low and Stable Underling Price Pressures.
Nomura analysts said in an outlook note that “With inflation pressures now well contained, Trade Policy Fricks. “
Nomura Forecasts A 2025 Gross Domestic Product Growth of 2.8% Year on Year, Lower Than the 4% Seen in 2024, but near the top end of the government’s forecast of 1% -3%.
They attributed the expected Decline to Weaker External Demand Under Trump’s Second Term, Despite Singapore’s Free Trade Agreement with the United States.
“That said, we think growth will resilient and Above Potential, As Strong Local Wage and Employment Growth Provide some Cushion Against Shocks from Increased Trade Protectionism,” The analysts WROTE.
Singapore’s GDP expanded by 4.4% in 2024, marking its Fastest Full-Year Growth Since 2021According to the ministry of trade and industry.
Balanced Budget Rule
Bofa noted that singapore has “fiscal flexibility” from accusable surpluses from 2021 to 2024, creating room for supplementary spending.
Maybank expects the 2025 budget to register a deficit of 6 billion Singapore dollars, or about 0.8% of GDP, “as the government draws down most of its accumulated SG$6.7 billion surplus over the electoral term.” The sg $ 6.7 billion Figure is according to Maybank Estimates.
Under the Singapore Constitution, A Government must maintain a Balanced Budget in Each Term of Government, and Can Tap Past Reserves only with Presidential Approvel. The government is not allowed to borrow to fund its operating expenses.
Since Independence, Singapore has tapped its past reserves only Twice: during the 2008 Financial Crisis and the Covid-19 Pandemic.
The Budget will also be the last for the current government before elections must be called by November.
Last month, Singapore announced the formation of Its Electoral Boundaries Review Committee, A Key Step in the Lead-up to a General Election in the City-State.
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