, Singapore

Should Singapore brace for another deficit in Budget 2016?

Last year’s shortfall was the largest since the GFC.

Singapore’s fiscal accounts are expected to return to surplus in FY 2016/2017, after last year’s budget booked the largest deficit in over seven years.

Analysts at BMI Research noted that last year’s shortfall was mainly driven by the bumper election year budget, which saw increased spending on social safety nets and various productivity schemes.

Last year’s deficit is estimated at 0.5% of the country’s Gross Domestic Product (GDP) or $2 billion, in stark contrast to the government’s penchant for booking annual surpluses.

“The Singapore government's fiscal accounts will return to surplus in FY2016/17 following a one-off primary deficit (estimated at 0.5% of GDP), and we forecast a modest surplus equivalent to 0.2% of GDP next year,” BMI Research said.

BMI Research added that the government will pare back its expansionary fiscal trajectory following the ruling party’s landslide victory at the polls. Despite this, the report stressed that productivity enhancement schemes will continue to get support while social safety nets will continue to be deepened.

The report also said that Singapore will remain one of the most fiscally responsible countries in the world over the coming years, and public coffers will continue to be boosted by the government’s considerable revenues from land sales.

“This means that its actual fiscal position is significantly stronger than even its annual primary surpluses suggest, and this contributes to its consistently growing stockpile of fiscal reserves. Coming from a position of such strength, the government has the ability to tweak its fiscal programmes on an annual basis without jeopardising its structural fiscal position,” said the report.

Likewise, the government has significant leeway for more powerful stimulus programmes should the need arise, providing a considerable buffer against a potential external downturn. 

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!


Italy brings its strong suits to Singapore’s fintech expo
Italian trade executive says 9 firms at the Singapore Fintech Festival 2023 exemplify the diverse range of products and expertise Italy can bring to the table.
Trust Bank sets the bar for digital banking in Asia Pacific
The digital bank targets to be Singapore's fourth largest retail bank, CEO Dwaipayan Sadhu said.
How brands can avoid inauthentic nostalgia marketing
A GlobalData expert flag inauthenticity in using throwback marketing and cite brand campaigns that are winning hearts.