Singapore: 2020 Budget deficit rose to record high – UOB

Economist at UOB Group Barnabas Gan reviews the budget figures in Singapore for this year.

Key Quotes

“For FY2020, the Finance Ministry is expecting an overall budget deficit of S$64.9 billion (13.9% of GDP), marking the largest deficit since Singapore’s independence. This is lower than the initial budget deficit estimate of S$74.2 billion (15.3% of GDP) made in a ministerial statement in October 2020.”

“Into FY2021, Singapore’s overall budget balance is projected to see a smaller deficit of S$11.01 billion (2.2% of GDP).”

“Our expectation for the budget to be expansionary came to pass. Budget 2021 will allocate S$11.0 billion for the COVID-19 Resilience Package to (1) safeguard the health for Singaporeans, (2) continue support for workers & businesses, and (3) provide targeted support for Singapore’s worst-hit sectors. Moreover, a Household Support Package worth S$900 million will be introduced to provide support for families still affected by the economic downturn.”

“Medium-to-long term measures are also at the heart of Budget 2021. Singapore will allocate S$24 billion over the next three years to “emerge stronger”. For FY2021, the Budget will aim to build three enablers, (1) promoting innovation and collaboration on a global scale, (2) providing capital to businesses, and (3) developing workers’ skills, talents and creativity.”

“The COVID-19 pandemic has prompted significant global shifts on the economic and social fronts, accelerated technological advances and created new global domains for competition and cooperation. Budget 2021, titled “Emerging Stronger Together”, will serve to allow the government to be a key enabler supporting Singapore’s recovery from the COVID-19 pandemic, as well as to invest in economic transformation and position Singapore for success in the long-term.”