• Singapore’s FY2022 fiscal deficit revised lower to S$2 billion from earlier estimate of S$3 billion

• Higher-than-expected operating revenue helped to cover increased spending

SINGAPORE’S fiscal deficit for FY2022 has been revised to a narrower S$2 billion or 0.3 per cent of gross domestic product (GDP), while FY2021’s final tally swung almost S$7 billion from an expected deficit to a fiscal surplus of S$1.9 billion.

The revised FY2022 deficit, which includes non-cash items for the capitalisation of significant infrastructure, marks an improvement from an earlier estimated deficit of S$3 billion, as higher-than-expected tax takings more than made up for increased spending. 

Although government spending was higher than expected – to meet priority areas such as housing and projects that were deferred because of Covid-19 – operating revenue also exceeded earlier estimates due to a stronger-than-expected economic recovery.

Total expenditure for FY2022 was revised to S$107 billion, higher by S$4.5 billion or 4.4 per cent than the original estimate of S$102.4 billion.

Spending for most ministries increased against previous estimates. Higher operating expenditure came from efforts to increase public housing supply, the resumption of activities and projects deferred as a result of Covid 19, and elevated costs from higher inflation. Development expenditure was more than estimated due to the resumption of ongoing construction projects.

The Ministry of National Development’s expenditure was revised to S$9.1 billion, almost double its S$4.6 billion estimate. The Ministry of Transport’s outflow was S$13.1 billion, about 28 per cent over the previous estimate.

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The waning effects of the pandemic meant that some ministries did not have to carry out as much support spending as expected. Health remained the biggest outflow at S$17.2 billion, but it was lower than the initial estimate of S$19.3 billion. Manpower spending, at S$6.2 billion, was about 29 per cent lower than estimated.

Special transfers rose about 33 per cent from estimated to S$2.9 billion. Additional support measures such as the Cost-Of-Living Special Payment and the GST Voucher Special Payment schemes more than offset significantly lower-than-expected disbursements under the Jobs Support Scheme – which took S$0.2 billion instead of the originally budgeted S$1.6 billion.

The S$6.3 billion of top-ups to endowments and trust funds surpassed the earlier estimate of S$4.05 billion due to off-cycle enhancements to the Progressive Wage Credit Scheme Fund and Assurance Package.

Operating revenue was revised higher to S$90.3 billion from S$81.8 billion on the back of strong corporate income tax collections. This reflected GDP growth of 7.6 per cent for 2021, since income taxes are paid on earnings from the previous year. (*see amendment note)

The estimate for net investment returns contribution from Singapore’s invested reserves remained largely unchanged at S$21.6 billion.

Excluding S$2.4 billion of non-cash adjustments to recognise the value and cost of significant infrastructure under the Significant Infrastructure Government Loan Act (SINGA), the revised overall budget deficit narrowed to S$4.2 billion from an estimated S$5.3 billion.

FY2021’s fiscal surplus was a result of higher actual operating revenue and lower total expenditure. Total expenditure was at S$94.8 billion, down S$3.6 billion from the previous estimate.

*Amendment note: An earlier version of this article incorrectly stated that GDP grew 8.9 per cent in 2021. It is in fact 7.6 per cent. The article above has been revised to reflect this.