By Amanda Lee

SINGAPORE–Singapore will announce its new budget Thursday, the first of the government’s new five-year term.

The budget for the fiscal year starting in April comes days after the city-state reported stronger-than-expected 2025 growth. Investors will be watching how the government maintains fiscal discipline while supporting artificial-intelligence adoption and sustaining economic momentum.

Here’s what to watch:

FISCAL POSITION: The budget will be key to reinforcing the foundations for long-term growth amid external challenges, DBS senior economist Chua Han Teng said.

“However, fiscal rules require a balanced budget over the term of government,” Chua said.

DBS expects the fiscal stance for FY 2026 to balance targeted policy support with fiscal prudence.

The Ministry of Finance is likely to take a more conservative approach in the new fiscal year, given sanguine growth and a potentially positive output gap in the coming quarters, economists at BofA Securities said.

ECONOMY: Singapore’s small, open economy ended 2025 on a strong note but remains exposed to external risks, including possible semiconductor tariffs.

“While Singapore’s economy looks stable in the near term, risks from growing uncertainties and a more fragmented global economy could weigh on growth over the next few years,” said RHB Bank’s Barnabas Gan.

Measures to ease cost-of-living pressures and support the labor market should underpin domestic demand and revenue, Gan said.

Tariffs are likely to remain a concern, Moody’s Analytics’ Denise Cheok noted.

“We look to see if there will be support targeted at sectors exposed to tariffs,” Cheok added.

ARTIFICIAL INTELLIGENCE: The government-appointed Economic Strategy Review Committees in January said Singapore should position itself as a leader in AI and build an AI-enabled economy.

The committees called for broader AI adoption to lift overall productivity and help companies develop new products.

To prepare workers, the government could consider a national AI workforce strategy, said EY Asean People Consulting Leader Samir Bedi.

Expanded government grants could also help firms with AI adoption and overseas expansion, Maybank economists Chua Hak Bin and Brian Lee wrote in a report.

JOBS: Job security and employment prospects for graduates are expected to be priorities.

Maybank said the budget could include cost relief and manpower support for companies, as well as training and internship programs for graduates and early-career workers.

As the economy faces more land and labor constraints, the budget may emphasize technology and innovation to sustain growth, said DBS’ Chua.

Workforce policies could also be refined to better support older workforce, RHB’s Gan said, including extending senior employment schemes to encourage continued participation.

COST OF LIVING: The government may introduce further measures to help households manage living costs, Gan said.

Support is likely to focus on vulnerable groups, including seniors and lower-income families, through additional subsidies, targeted financial aid and expanded social services.

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

02-10-26 2259ET