Budget 2023: S$2 billion deficit in FY22, S$0.4 billion deficit for FY23

Renald Yeo

Published Tue, Feb 14, 2023 · 05:26 PM

Singapore Budget 2023

THE government expects a deficit of S$0.4 billion – or about 0.1 per cent of gross domestic product (GDP) – in FY2023, which is in line with projected economic conditions for the year, said Finance Minister Lawrence Wong on Tuesday (Feb 14).

For FY2022, Singapore is expected to post a deficit of S$2 billion – or 0.3 per cent of GDP.

The government does not expect to draw on past reserves for FY2023 as it did in the last three financial years as “things return to normal”, Wong said during his Budget speech.

To retain discipline in how the government manages its finances, the Contingencies Fund balance – which was raised from S$3 billion to S$16 billion in Budget 2020 to meet urgent and unforeseen cash flow needs during the pandemic – will be reduced to S$6 billion.

Said Wong: “This will ensure adequate resources for unforeseen circumstances, while retaining discipline in how we manage our finances.”

There is currently no legal mechanism to make a reduction. Only an increase in the balance can be made. The government will therefore amend the Constitution to facilitate reductions, Wong said, with the bill to be tabled for its first reading later this month.