Singapore presented a bigger budget for the coming year, providing support for its most struggling sectors but keeping a surplus in case global economic conditions worsen and put the city-state's growth at risk. Following up on recommendations by a key advisory panel this month, the budget unveiled projects to invest in infrastructure, deepen the workforce's tech skills and digitalise the economy.
Firms will get help to scale up and invest overseas to tap into growing markets around Singapore, as the government aims to maintain an average 2-3 percent annual economic growth rate over the next 5-10 years.
Singapore's budget surplus for the fiscal year beginning April 1 is expected to be 0.4 percent of economic output, compared with an estimated 1.3 percent in 2016/17.
Expenditures would be 5.2 percent higher than in the current year, at S$75.07 billion ($52.9 billion).
"When I presented the last budget, Brexit seemed remote and the US had just started the process of electing their new president. Events since then are a stark reminder of how quick and unpredictable change can be," Finance Minister Heng Swee Keat told parliament on Monday.
"As we expect expenditures to continue rising in the long term, this budget position is prudent, while supporting firms and households in the midst of continued economic restructuring," Heng said.
Singapore's wide-open economy is highly dependent on trade, and Washington's pull-out from the Trans Pacific Partnership trade deal has been a major blow to the island's growth plans.
Analysts say that while the bigger budget shows the government's willingness to offer support to the sluggish economy, the plans for a surplus shows policymakers want to keep some ammunition in case risks associated with Donald Trump's trade policies in the United States materialise.
"There was a bit more scope to push a bit further... Maybe they're saving the bullets in case things turn down," said Chua Hak Bin, senior economist for Maybank Kim Eng. "Clearly, the government didn't go all out."
Singapore's governments are mandated to run a balanced budget over the entire length of their terms.
While local firms, especially those in the struggling construction sector, seemed to be the clear winners in the budget, utilities and consumers will take a hit.
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