\n By Amanda Lee <\/p>\n
\n SINGAPORE–Singapore will announce its new budget Thursday, the first of the government’s new five-year term. <\/p>\n
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. <\/p>\n
\n Here’s what to watch: <\/p>\n
\n 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. <\/p>\n
“However, fiscal rules require a balanced budget over the term of government,” Chua said. <\/p>\n
DBS expects the fiscal stance for FY 2026 to balance targeted policy support with fiscal prudence. <\/p>\n
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. <\/p>\n
\n ECONOMY: Singapore’s small, open economy ended 2025 on a strong note but remains exposed to external risks, including possible semiconductor tariffs. <\/p>\n
“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. <\/p>\n
Measures to ease cost-of-living pressures and support the labor market should underpin domestic demand and revenue, Gan said. <\/p>\n
Tariffs are likely to remain a concern, Moody’s Analytics’ Denise Cheok noted. <\/p>\n
“We look to see if there will be support targeted at sectors exposed to tariffs,” Cheok added. <\/p>\n
\n 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. <\/p>\n
The committees called for broader AI adoption to lift overall productivity and help companies develop new products. <\/p>\n
To prepare workers, the government could consider a national AI workforce strategy, said EY Asean People Consulting Leader Samir Bedi. <\/p>\n
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. <\/p>\n
\n JOBS: Job security and employment prospects for graduates are expected to be priorities. <\/p>\n
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. <\/p>\n
As the economy faces more land and labor constraints, the budget may emphasize technology and innovation to sustain growth, said DBS’ Chua. <\/p>\n
Workforce policies could also be refined to better support older workforce, RHB’s Gan said, including extending senior employment schemes to encourage continued participation. <\/p>\n
\n COST OF LIVING: The government may introduce further measures to help households manage living costs, Gan said. <\/p>\n
Support is likely to focus on vulnerable groups, including seniors and lower-income families, through additional subsidies, targeted financial aid and expanded social services. <\/p>\n
\n Write to Amanda Lee at amanda.lee@wsj.com <\/p>\n
\n (END) Dow Jones Newswires<\/p>\n
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