In the Budget Statement in Parliament on Tuesday (Feb 18), Deputy Prime Minister and Finance Minister Heng Swee Keat gave a summary of Singapore’s overall Budget position, noting that it is expected to be “more expansionary”.
The Government is looking at an overall Budget deficit of S$1.7 billion, or 0.3 per cent of GDP for fiscal year 2019, said Mr Heng. Due to “lower-than-expected expenditures arising from unforeseen project delays”, the deficit for FY2019 is S$1.8 billion less than the S$3.5 billion deficit forecast a year ago.
Excluding the the Government’s top-ups to funds and Net Investment Returns Contribution from its reserves, it expects a basic deficit of $5.1 billion, or 1.0 per cent of GDP.
Singapore’s Budget position for the new fiscal year will be “more expansionary”, noted Mr Heng. Due to increased risk in the global economy and the Covid-19 outbreak, which continues to ravage the world, the city-nation’s economy is facing difficulties and uncertainties.
The Government’s Budget position, which will have a larger basic deficit of S$12.3 billion, should provide a “fiscal boost’ to the economy. This, alongside the Stabilisation and Support Package, should be able to cover “near-term” concerns.
Mr Heng noted that Singapore can expect an overall Budget deficit of S$10.9 billion or 2.1 per cent of GDP during this fiscal year. He said that as the country’s fiscal surplus is “sufficient” for funding the overall deficit in Fiscal Year 2020, there will be no need to draw on past reserves.