Singapore has forecast a second year of budget surpluses despite Prime Minister Lawrence Wong announcing a long list of handouts, rebates and infrastructure investments ahead of national elections due later this year.
Even with the fresh spending, Wong forecast a fiscal surplus of S$6.8 billion (US $5.1 billion), or 0.9% of gross domestic product, on strong corporate and consumption taxes.
That’s a turnaround from a Bloomberg survey of analysts, who had expected the city-state to run up a budget deficit of 0.3% of GDP to fund support measures aimed at bringing down costs for households and businesses.
Wong, 52, who is also finance minister, characterised the budget for the fiscal year starting in April as one “for the future — tackling immediate challenges while laying the groundwork for a stronger, more resilient tomorrow”.
An expansionary budget could help shore up Singapore’s economy as it braces for the impact of US President Donald Trump’s tariffs and the splintering of global trade. The city-state expects growth to come in at 1-3% this year, down from 4.4% in 2024.
The government plans to spend almost S$124 billion in the 2025 fiscal year for everything from airport upgrades to vouchers for supermarkets and elder care, according to data released after Wong’s budget speech.
Acknowledging that rising prices have pinched consumer budgets, Wong said households would receive S$800 in vouchers to help cover costs at supermarkets and restaurants, with the first S$500 coming as soon as May. That marks an increase from a total of S$600 announced the previous year.
“Singaporeans are still adjusting to these new price realities,” Wong said. “Some have had to tighten their belts, rethink their spending habits or make difficult trade-offs to manage their expenses.”
Wong has credited the cash handouts for helping bring income inequality to its lowest level since 2000. The budget is set to help the government lay the groundwork for elections that have to take place by November.
Elevated costs from food to housing remain a major concern for voters despite cooling inflation. Persistent geopolitical risks — including the threat of a new tariff war — could add to price pressures in the trade-dependent nation.
“We cannot afford to stand still — global economic competition has intensified, and many other countries and cities are pressing ahead,” Wong said. “If we fail to stay competitive, we will be left behind.”
Wong took over as Singapore’s fourth prime minister in May 2024. He has been focusing on providing a greater social safety net for the working class and relying less on foreigners for higher-paying jobs.
Trump tariffs
The government will also double the amount of rebates to help households with their utilities expenses, as well as offer additional S$500 in credits for families for every Singaporean child aged 12 and below, Wong said. Other measures were also announced to help with education costs, increase pensions, and extend more assistance for low-income households.
For the broader economy, Wong said the government would add an additional S$5 billion for upgrades to the country’s international airport and will offer a 50% rebate on corporate taxes for companies, capped at S$40,000.
Tax incentives will also be offered for companies and fund managers that choose to list in the Singapore stock exchange, amid feedback that it’s no longer as attractive, the prime minister said.
The government will also top up the National Productivity Fund by S$3 billion, and develop a new semiconductor R&D fabrication facility.
“We want Singapore to be a place where exciting ventures develop and grow into the leading enterprises of the future,” Wong said.