Singapore is set to unveil its 2017 budget on Monday, with economists expecting the government to deliver a modest fiscal push to propel the city-state’s economy to its next phase of growth.
An improving trade sector, helped by recovering Chinese demand, has taken pressure off on Finance Minister Heng Swee Keat to provide a large stimulus package, Bloomberg reports.
However, as consumer demand remains weak and global uncertainties mount, the fiscal policy will stay focused on targeted measures, the report said.
“The urgency for a sizable counter-cyclical fiscal stimulus has probably eased compared to just three months ago,” Kit Wei Zheng, an economist at Citigroup in Singapore, was quoted as saying.
The budget comes less than two weeks after a government-appointed panel, led by Heng, outlined initiatives to propel the economy into its next phase of growth.
The Committee on the Future Economy recommended a range of measures to help spur growth to 2 percent to 3 percent a year over the next decade.
The goals outlined include skills development, helping small businesses adopt digital capabilities and easing regulations for businesses.
The budget will probably give effect to some of these proposals, including possible moves to shore up the manufacturing industry.
The government’s strong focus on social spending will probably take a backseat and measures to support job-creation will get more attention, Vaninder Singh, an economist at Natwest Markets, told Bloomberg.
To help consumers spend more, the government may assist in reducing the cost of living rather than cutting taxes, Singh said.
“Singapore will have to continue fiscal support to the economy,” he said. “We expect the budget to focus its attention on helping corporates create jobs and helping households spend.”
– Contact us at [email protected]