Singapore’s Budget 2026, set to be unveiled by Prime Minister and Finance Minister Lawrence Wong on 12 February, will be the first under the new Cabinet following the May 2025 General Elections. This budget arrives amidst significant global shifts, including rising geopolitical tensions and the challenges posed by AI-driven economic changes. UOB Global Economics and Markets Research anticipates a fiscal surplus of S$8.1b (1.0% of GDP) for FY2026, driven by robust revenue collections.
The expected surplus for FY2025 has been revised upwards to S$7.6b (1.0% of GDP), surpassing the initial projection of S$6.8b (0.9% of GDP). This adjustment is attributed to stronger corporate income tax, stamp duty, and Vehicle Quota Premiums. Despite higher-than-expected expenditures, the fiscal outlook remains positive.
Budget 2026 is likely to focus on three primary themes: targeted support for low-income households, fostering an AI-ready economy through skills and innovation, and enhancing market access for SMEs and MNCs. These initiatives aim to address the K-shaped economic recovery, where benefits from a tech-led market may not be evenly distributed, and to mitigate AI-related job displacement concerns.
The budget will also consider long-term challenges such as rising healthcare costs due to an ageing population and the need for increased defence spending amid heightened geopolitical tensions. The Net Investment Returns Contribution continues to play a crucial role in supplementing operating revenues, highlighting the government’s commitment to fiscal prudence.
As Singapore navigates these complex challenges, Budget 2026 will be pivotal in securing the nation’s future economic stability and growth.
