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Lawrence Wong, then VicePrimer Minister and Minister of Finance of Singapore, speaking during the Summit of the Milken Asia Institute in Singapore, on September 13, 2023. Wong, now the country’s prime minister, delivers the budget on February 18.
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Singapore is preparing for his first budget under Prime Minister Lawrence Wong, and analysts expect more support for both homes and companies.
Wong, who took Lee Hsien Loong’s helm in May last year, will deliver the budget on February 18. The country is due to the general elections in November.
In a video posted on your YouTube channel On Tuesday, Wong said that this year’s budget “will address the immediate concerns that all of you have raised cost pressures and also address the longest -term challenges to ensure that Singapore can move forward and stay at the forefront in this world problematic”.
In a note of February 4, Maybank analysts pointed out that as Singapore celebrates its 60th year of independence, the government is likely to implement a generous “SG60 budget.”
Home and business support
Maybank analysts said that said budget will probably include a package of support measures so that households pay the costs of life, such as effective, consumption coupons and reimbursements in public service invoices, as well as more opportunities for workers to improve their skills through courses.
Bank of America analysts predict that the next budget will be “to feel good”, saying that they expect measures “destined to relieve the cost of living pressures to form the central piece of budget 2025. A new ‘package’ to support medium Age and average income groups can be possible, given signals in the New Year’s Day message. “
In his New Year message, Wong said: “We will provide more specific help to those who find it harder older parents such as young children. “
On the Business Front, Maybank wrote, there could be more reimbursements for the corporate tax, as well as reimbursements on the property tax of commercial properties.
More improvements to existing schemes to help companies can also be on the table, such as subsidies to relieve labor costs.
Maybank analysts also pointed out that no more property cooling measures or taxes on wealth do not expect, noting that “significant increases” to property taxes and income were implemented in 2022 and 2023.
“The government will probably wait to see if the increase in housing supply in the coming years will cool prices,” said Maybank.
Macroeconomic perspective
In the macroeconomic front, Bofa analysts said that the budget is expected to be a “growth in growth” budget, given “low and stable” inflation and the uncertain global perspective.
He The Singapore monetary authority reduced its 2025 central inflation forecast range to 1% -2% of 1.5-2.5% after the strong decrease to 1.9% in the fourth quarter (from 2.7% in the third quarter), citing a return to low and stable underlying price pressures.
Nomura analysts said in an outlook note that “with the inflation pressures now well contained, we believe that the most is changing their approach to the growth perspective, which he considers that he faces downward risks due to the growing friction of politics commercial”.
Nomura predicts a growth of the Gross Domestic Product of 2025 of 2.8% year after year, less than 4% seen in 2024, but near the upper end of the government prognosis of 1% -3%.
They attributed the expected decrease to the weakest external demand under Trump’s second mandate, despite the Singapore free trade agreement with the United States.
“That said, we believe that growth will continue to be resistant and above the potential, since the strong local salary and employment growth provide a cushion against the clashes of the increase in commercial protectionism,” the analysts wrote.
Singapore’s Expanded GDP by 4.4% In 2024, marking his Growth of the whole year faster since 2021According to the Ministry of Commerce and Industry.
Balanced budget rule
Bafa said Singapore has “fiscal flexibility” of accumulated surpluses from 2021 to 2024, creating space for complementary expenditure.
Maybank expects the 2025 budget to register a deficit of 6 billion dollars from Singapore, or around 0.8% of GDP “, as the Government withdraws most of its accumulated surplus SG $ 6.7 billion over the electoral term” . The figure of SG $ 6.7 billion is according to Maybank estimates.
According to the Constitution of Singapore, a government must maintain a balanced budget in each government mandate and can take advantage of reserves beyond reservations only with presidential approval. The government cannot borrow to finance its operating expenses.
From Independence, Singapore has taken advantage of his past reserves only twice: during the financial crisis of 2008 and the Covid-19 pandemic.
The budget will also be the last one for the current government before the elections should be called in November.
Last month, Singapore announced training From its electoral limits review committee, a key step in the period prior to a general election in the city-state.
