Govt projects $1.16b deficit for FY2014

IF an overall budget deficit of $1.16 billion materialises in FY2014 as projected, it would mark the first time since 2009 that Singapore would run a shortfall. The estimated deficit - which works out to 0.3 per cent of gross domestic product - blew private sector economists' projections out of the water. While they had been expecting the surplus to narrow as a result of higher social spending, none had forecast a negative balance.

The overall budget deficit factors in the new $8 billion Pioneer Generation Fund, and includes an estimated net investment returns contribution of $8.1 billion.

"This is close to a balanced budget, and will not result in a draw on past reserves as we have sufficient surpluses from the last few years," said Finance Minister Tharman Shanmugaratnam yesterday.