SINGAPORE BUDGET 2021 ·
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Cutting Budget deficit while sustaining positive fiscal impulse a knotty endeavour

Downturn has curtailed tax revenue; planned GST hike will not take place in 2021

Singapore

FOLLOWING 2020's fiscal largesse, and marking the start of a new term of government, Budget 2021 is expected to be a more modest affair with a less-dramatic deficit.

But keeping the deficit small while maintaining a positive fiscal impulse will be tough. The downturn has curtailed tax revenue, and new measures are likely to be off the table, to avoid hurting the nascent recovery.

While expectations of the FY2021 deficit vary, the consensus is that it will be nowhere near FY2020's unprecedented deficit of over 15 per cent of gross domestic product (GDP).

"It would be logical and prudent to expect a more modest, but likely still expansionary fiscal position for FY2021, since the economic...

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