Budget 2026: Analysts expect less support for households amid positive economic outlook

SINGAPORE: A few days before Prime Minister Lawrence Wong announces Singapore’s Budget for 2026 on Thursday (February 12), analysts are weighing in as to what they expect from it.

A February 6 piece from Reuters titled “Singapore budget may be less generous amid resilient growth” appeared to warn people not to expect too much.

It said that after the additional support given to Singaporeans in 2025, this year the budget is expected to be more restrained, with a focus on “balancing robust growth with longer-term fiscal discipline.”

Read also: BUDGET 2025: PM Wong announces additional support ‘as long as it’s needed’ as Singaporeans face higher costs of living

As it is early in the parliamentary term, the government is expected to be fiscally prudent despite a relatively positive economic outlook. This way, if economic situations decline, more support can be given.

One key item from the Reuters piece is that industry analysts say they expect cash transfers to households to be less this year in comparison to 2025.

Similarly, Maybank said “CDC vouchers will likely be scaled back from the generous quantum in FY2025 (CDC $1.06b, SG60 $2.2b) and be more targeted.”

“We also expect Budget 2026 to pay greater attention to longer-term measures aimed at positioning for the future,” Reuters added.

While the economy of the city-state grew by 4.8 per cent last year, PM Wong has already warned that sustaining this pace of growth in 2026 will be challenging, with the Trade Ministry predicting growth to be from 1 to 3 per cent.

As the demand for AI continues, sustained investments from the government in technology and innovation are also expected. Significantly, the Government announced last month a S$1 billion investment through 2030 in public AI research.

The piece quoted Maybank economist Chua Hak Bin as saying the Government may offer incentives for companies to hire more, given that the citizen unemployment rate edged up to 3 per cent last year, from 2.9 per cent in 2024.

Inflation

UOB Global Economics and Markets Research’s latest analysis, meanwhile, underlined that addressing inflation is likely to be a large part of this year’s budget.

Core inflation, which went down from 2.8 per cent in 2024 to 0.7 per cent last year, re-flation may be in the cards this year.

The Government has forecast inflation for 2026 to be between 1 and 2 per cent, and UOB anticipates average core inflation to be 1.5 per cent. /TISG

Read also: PM Wong: We’ve heard you. Your voices shape #SGBudget2026