Singapore to announce 2022 budget

The Government of Singapore will announce its budget for 2022 today.

Singapore is expected to increase its Goods and Services Tax (GST) from 7% to 9% as part of measures to eliminate the government’s current annual budget deficit of $8.2 billion. The deficit mushroomed to a record 13.9% of GDP at the height of the pandemic in 2020. Over the last two years, pandemic-induced spending has amounted to over $74.4 billion.

Singapore will likely roll out the GST in stages until 2025 to avoid inflation like that caused by the GST increase in 2007. In turn, Singapore may record a slight budget surplus this year equivalent to 0.4% or 0.6% of GDP. Singapore’s economy is projected to grow between 3% and 5% this year, after the nation saw its highest growth in a decade last year.

In the short-to-medium term, the government will likely discontinue direct support for small businesses through grants and loans as the sales tax takes effect and as Singapore seeks to support its aging population in the long-term. At the same time, a stimulus package of $4.5 billion over the next five years will support low-income families as the cost of living rises.