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Budget 2020: Expected overall budget deficit of S$10.9b; no draw on past reserves for FY2020

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Finance minister Heng Swee Keat said the government is expecting an overall budget deficit of S$1.7 billion, or 0.3% of Singapore's GDP for FY2019.

THE Singapore government will not be drawing on past reserves as it has sufficient accumulated fiscal surplus to fund the overall deficit in FY2020, Deputy Prime Minister and Finance Minister Heng Swee Keat said in his Budget speech on Tuesday.

He said the government is expecting an overall budget deficit of S$1.7 billion, or 0.3 per cent of Singapore's gross domestic product (GDP) for FY2019.

This is S$1.8 billion lower than the S$3.5 billion deficit forecasted a year ago. Mr Heng said this is due to lower-than-expected expenditures arising from unforeseen project delays.

Excluding the government's top-ups to funds and Net Investment Returns Contribution from the reserves, Mr Heng said they are expecting a basic deficit of S$5.1 billion, or 1 per cent of GDP.

Given the "considerable uncertainty" in the coming year, stemming from heightened risks in the global economy and the Covid-19 outbreak, Mr Heng said Singapore's budget position will be more expansionary for FY2020, with a larger basic deficit of S$12.3 billion.

"This, together with the Stabilisation and Support Package, will impart a considerable fiscal boost to the economy to address near term concerns," Mr Heng said.

He said the overall budget deficit is expected to be S$10.9 billion or 2.1 per cent of GDP.

For more Budget 2020 stories, visit bt.sg/budget20.