Singapore budget: city state set for US$12 billion surplus as Wong unveils AI ambitions
PM Lawrence Wong says while defence spending will be kept at about 3 per cent of GDP, Singapore is prepared to spend more if the need arises
Singapore expects a surplus of S$15.1 billion (US$12 billion) or 1.9 per cent of gross domestic product for the 2025 financial year, more than double an initial projection of S$6.8 billion, Prime Minister Lawrence Wong has said as he unveiled an aggressive bid to pursue AI ambitions in his annual budget speech.
The higher revenues came from corporate income tax and asset-related revenue collections, including stamp duty and vehicle quota premiums, Wong said on Thursday.
For the 2026 financial year, he was expecting a surplus of S$8.5 billion, or 1 per cent of GDP.
Analysts called the bumper crop “surprising” and said the prudent estimation for the next financial year would provide Singapore with more reserves to tackle potential downturns.
Chua Hak Bin, a senior economist at Maybank, told This Week in Asia the surplus for the 2026 financial year could exceed the government’s prediction of 1 per cent of GDP.
“The government is maintaining a prudent fiscal surplus in the first year of the new electoral term, preserving some dry powder to draw upon in the event of any unexpected shock or downturn,” Chua said.
Wong also revealed that the voucher amount to ease cost-of-living pressures for residents dropped slightly from the previous year, when S$800 was distributed to each Singaporean household. A total of S$500 will be paid out to households in January next year.