Singapore | Budget targets modest fiscal consolidation to spur growth

To fight the worst economic recession in Singapore’s history, the Finance Minister, Heng Swee Keat, delivered close to S$100bn (20% of GDP) worth of fiscal stimulus last year in four budgets and two ministerial statements. Accordingly, the government estimates the FY2020 overall fiscal deficit to be close to 14% of GDP, a significant departure from the average overall fiscal surplus of 0.8% of GDP per year during 2010-2019.

What you will learn from this report:

• With better revenue prospects as the economy recovers, Singapore’s FY2021 budget envisages the primary fiscal deficit narrowing from previous fiscal year.
• Our fiscal projections reflect both our growth outlook and the tendency for the government’s initial deficit estimates to be more cautious.
• Over the medium-term, we expect the authorities to stick to the fiscal consolidation path given their mandate to achieve a balanced budget over the government’s five-year term.