Lawrence Wong, then Singapore’s vice-president and finance minister, delivered a speech at the Milken College Asia Summit in Singapore on September 13, 2023. The current prime minister of the country will deliver the budget on February 18.
Bloomberg|Bloomberg|Getty Images
Singapore is preparing for Prime Minister Lawrence Wong’s first budget, and analysts are looking to provide more support for families and businesses.
Wong, who was run by Lee Hsien Loong in May last year, will provide a budget on February 18. The country will hold a general election in November.
In a video posted on his YouTube channel Wong said on Tuesday that this year’s budget will “resolve immediate concerns that everyone has raised about cost pressures and address long-term challenges to ensure Singapore can move forward and stay ahead in this difficult world.”
In a note on February 4, Maya Bank analysts pointed out that the government may launch a generous “SG60 budget” as Singapore celebrates its 60th year of independence.
Home and business support
Malay Bank analysts say such a budget could include a package of supportive measures to support families to pay discounts on cash, consumption vouchers and utility bills, as well as more opportunities to improve their skills through the course.
Bank of America analysts predict the upcoming budget will be a “feel good” one, saying the measures they expect to take are designed to relieve the pressure on life that forms the core of the 2025 budget. In the new year news, there may be a possible middle-income group. ”
In his New Year’s Day news, “We will provide more targeted assistance to those who are more difficult to cope with, especially the elderly and low-income groups. However, we will not ignore other areas, including middle-income and middle-aged people, who are caring for them,” Huang said. Older parents and younger children.”
Malay Bank wrote that when it comes to business, there are more rebates for corporate taxes, as well as rebates for property taxes on commercial properties.
More enhancements to existing programs may also help companies on the table, such as grants that reduce labor costs.
Malay Bank analysts also pointed out that they do not want more property cooling measures or wealth taxes, noting that “major hikes” on property and income taxes will be implemented in 2022 and 2023.
“The government may wait to see if the increase in housing supply will cool prices in the coming years,” the Mayans said.
Macroeconomic prospects
BOFA analysts said on the macroeconomic side that the budget is expected to be a “promoted” budget given “low and stable” inflation and uncertain global outlook.
this Singapore’s currency authority reduces its 2025 core inflation forecast range From 1%-2% to 1%-2% in the fourth quarter, to 1%-to-1% after a sharp drop in the fourth quarter to 1.9% (2.7% in the third quarter), citing the return to low and stable base price pressure .
“There is now full of inflationary pressures, and we believe MAS will focus on its growth prospects, which is a downside risk due to escalating trade policy frictions,” Nomura analysts said in an outlook.
Nomura predicts GDP growth of 2.8% year-on-year in 2025, down from 4% in 2024, but close to the highest end of the government’s forecast of 1%-3%.
Despite a free trade agreement between Singapore and the United States, they attributed the expected decline to weak external demand under Trump’s second term.
“That is, we believe growth will remain resilient and above the potential, as strong local wages and job growth provide some buffering for increased shocks to trade protectionism,” analysts wrote.
Singapore’s GDP expanded by 4.4% In 2024, mark Fastest growth for the whole year since 2021According to the Ministry of Trade and Industry.
Balanced budget rules
BOFA pointed out that Singapore’s accumulated surplus from 2021 to 2024 has “fiscal flexibility” and creates space for supplementing spending.
Maybank expects the budget deficit in 2025 to be $6 billion, or about 0.8% of GDP, “as the government lowers its accumulated surplus of $6.7 billion during the election period.” According to Maybank’s estimates, SG’s $6.7 billion figure is based on.
Under the Singapore Constitution, the government must maintain a balanced budget for each government term and can only use past reserves with the approval of the president. The government does not allow borrowing its operating expenses.
Singapore has tapped its past reserves just twice since independence: during the 2008 financial crisis and the COVID-19-19 pandemic.
The budget will also be the last for the current government, before elections must be held by November.
last month, Singapore announces this formation In its Election Boundary Review Committee, this is a key step in the city-state election.
