Heng warns of lingering fiscal tightness, urges 'prudent spending' ahead of Budget

SINGAPORE'S fiscal situation will be "tight" for several years, Deputy Prime Minister Heng Swee Keat has said, a day before he is to deliver the Budget.

Mr Heng, who is also finance minister, warned in a Facebook post on Monday that the Republic will end FY2020 with "a record budget deficit".

In the wake of drawdowns on the national reserves, he reiterated a call for commitment to an "economically vibrant" and "fiscally disciplined" society.

The Ministry of Finance estimated last October that it would incur a budget deficit of S$74.2 billion for the fiscal year. Now, Mr Heng has added: "Our fiscal situation will continue to be tight in the coming years."

Still, he dubbed his upcoming spending plan the "Emerging Stronger Together Budget", a reference to his catchphrase from the downturn last year.

"As Covid-19 has accelerated changes and created new ones, we must also navigate these shifts to thrive in a post-Covid world," he said, urging Singaporeans to "stay vigilant" even during the final phase of a three-stage economic reopening.

To achieve his vision of a stronger recovery, Mr Heng also said that "we must find new ways to work together, innovate, and transform our economy".

Climate change, sustainability and support for "those with greater needs" were among the priorities that he laid out.

"Importantly, we must continue to be prudent in our spending, and leave a better future for our children," he added.

His latest message came as the Singapore economy shrank by 5.4 per cent year on year in 2020, according to a separate announcement on Monday.

The Ministry of Trade and Industry expects gross domestic product to grow by between 4 per cent and 6 per cent in 2021, though that would still fall below pre-pandemic levels.