Pacific Money | Economy | Southeast Asia

Singapore’s 2026 Budget: A Good Time for Surpluses

The city-state’s fiscal prudence puts it in a good position to weather the current volatility in the global oil market.

Singapore enters 2026 in a relatively secure fiscal condition. Revenue collected in 2025 was 13 percent higher than in 2024, and 6.6 percent higher than the forecast. This resulted in an overall budget surplus of SG $10.5 billion or 1.3 percent of GDP, making Singapore one of the only major economies in the region that has not only closed the fiscal deficit it ran during the pandemic, but is now generating regular surpluses.

Meanwhile, spending for 2025 came in right on target, including $3 billion in vouchers to celebrate Singapore’s 60th anniversary and offset cost-of-living increases. The Changi Development Fund, Coastal Protection Fund, and Future Energy Fund were each topped up with $5 billion. Investment returns, mainly from sovereign wealth funds like Temasek and GIC, reached $27 billion.

2026 is set to be more of the same. Budget planners are forecasting a surplus of $4 billion or 0.5 percent of GDP on the back of continued strong revenue collection, especially growth in corporate income taxes. Changi will get $6 billion for modernization and expansion, and the National Productivity Fund, which focuses on the use of technology to boost economic growth and productivity, such as artificial intelligence, will also get $6 billion.

Taken together, this sends a pretty clear message that despite geopolitical turbulence, trade tensions and the increasing incidence of major armed conflicts, Singapore remains in a stable fiscal condition. The economy, despite being heavily reliant on global flows of trade and investment, was expected to grow by 2 and 4 percent in 2026.

This is not unusual for Singapore, where fiscal discipline and surpluses have long been a hallmark of public policy. But it must be noted that this budget, and the assumptions it is based on, was made prior to the U.S. attacking Iran and the subsequent disruption it has caused to the global supply of energy. Will this........

© The Diplomat