Singapore’s upcoming Budget 2025, set to be unveiled by Prime Minister and Finance Minister Lawrence Wong on 18 February, is anticipated to register a $6b deficit, equivalent to 0.8% of GDP.
This budget, the last before the General Election, aims to provide substantial support to businesses and households amidst ongoing economic pressures.
According to Maybank Securities’ Chua Hak Bin, Regional Co-head of Macro Research, and Brian Lee, Economist, the government plans to draw down most of its accumulated $6.7b surplus over the electoral term from FY2021 to FY2025.
The budget is expected to focus on easing cost pressures and addressing manpower issues, with initiatives to promote upskilling and investments in artificial intelligence and green solutions.
“We expect generous support for firms and households to defray cost pressures and address manpower issues,” they noted.
Additionally, the budget may introduce details on JS-SEZ incentives, schemes related to the Global Minimum Tax, and early measures to revitalise the stock market. However, property cooling measures and wealth taxes are not anticipated.
Economists Bin and Lee forecast Singapore’s GDP growth to remain resilient, projecting a growth rate of 2.6% in 2025 and 2.3% in 2026, following a strong 4% growth in 2024. The SG60 election budget, alongside easing monetary conditions and the construction of mega infrastructure projects, is expected to cushion the impact of global uncertainties, including potential trade tensions.
As Singapore prepares for its General Election, Budget 2025 will play a crucial role in shaping the nation’s economic landscape, addressing immediate challenges whilst laying the groundwork for future growth.
