Lawrence Wong, Singapore’s deputy prime minister and finance minister, delivered the Singapore Budget 2023 on Feb. 14 in Parliament.
Ore Huiying | Bloomberg | Getty Images
SINGAPORE — Singapore says its budget deficit for 2022 might be lower than expected — at $1.5 billion dollars, or 0.3% of its gross domestic product.
In his budget speech to Parliament on Tuesday, Finance Minister Lawrence Wong said: “We expect a slight deficit of $2 billion Singapore dollars ($1.5 billion) or 0.3% of GDP for FY2022.” The country previously estimated the 2022 deficit would are available at S$3 billion.
Wong, who can be deputy prime minister, attributed it to higher-than-expected revenue last yr.
He expects the deficit for 2023 to narrow barely to S$0.4 billion — or 0.1% of GDP, and said the country won’t be drawing on past reserves this yr.
“We now expect to attract a lower amount of as much as S$3.1 billion from past reserves. This brings the entire expected draw on past results from FY 2020 to FY 2022 to $$40 billion.” That is lower than the initial S$52 billion the federal government had sought approval for.
“It reflects our prudent approach in using our reserves — drawing on them judiciously only when there are compelling reasons to achieve this,” he said.
Singapore hopes to lower the budget deficit for 2023 through tax revenues.
It is going to be implementing a worldwide minimum effective tax rate of 15% for big multinational corporations, in addition to increasing taxes for higher-value residential and non-residential properties.
Global inflation
Wong acknowledged that 2022 was a “yr of brutal inflation worldwide” and rising costs pressures proceed to weigh on the Singapore economy, which grew 3.6% last yr.
“By the top of last yr, global inflation was around 9% inflation reached historic levels and lots of advanced economies,” he said.
“Singapore too needed to contend with these inflationary pressures — [the Monetary Authority of Singapore] has tightened our monetary policy five times since October 2021,” he added.
Singapore’s core inflation rose to five.1% in October, and stayed unchanged until December.
He said Singaporeans must “brace ourselves for a period of relatively higher inflation each globally and in addition in Singapore.”
“There are some early signs that global headline inflation rates are softening, however it is premature to declare victory. We expect headline inflation to stay high no less than for the primary half of this yr,” said Wong.
Household support
For instance, households can expect as much as S$700 in GST vouchers this yr, up from the present S$500.
GST might be raised by one other percentage point to 9% next yr, a move that is expected to extend inflation further.
Households also can expect as much as S$850 in GST vouchers in 2024 to assist them address the GST hike.
Business support
“We are going to help businesses weather the immediate challenges of tighter financial conditions and better energy prices,” he said. Measures include extending current enhancements to the enterprise financing scheme and energy efficiency grant until thirty first March 2024, in addition to working capital loans for local construction projects via project loans.
“I hope this may also encourage financial institutions to proceed extending credit to viable enterprises.”
It is a developing story. Please check back for updates.
