A Broad-Based Budget For All

While sounding a word of caution for medium-term government revenues, Prime Minister Wong delivered a budget that continued to defray the pain of inflation with an eye toward clean energy, climate change, and helping lower-income households. No new equities market proposals were announced, which may disappoint investors in the short term. Our top picks are BAL, CD, KEP, OCBC, STE, STM, SCI, ST, VMS, and YZJSGD.

Key Highlights of Budget 2025

Singapore’s Prime Minister (PM) and Minister of Finance, Mr. Lawrence Wong, delivered the 2025 Budget on 18 February 2025. Key takeaways from his speech include:

1. Growth at a Reasonable Pace

• Singapore’s economy expanded by a better-than-expected rate of 4.4% in 2024.
• However, PM Wong cautioned that there remains ‘considerable uncertainty’ about future revenues.
• For 2025, GDP growth is forecasted at 1.0%-3.0%, while inflation is expected to range between 1.5%-2.5%.
• Long-term growth target: 2.0%-3.0% GDP growth per year over the next decade.

2. Measures to Defray Rising Costs

To mitigate the impact of inflation, the government will provide:

• S$800 Community Development Council (CDC) vouchers (up from S$300 in 2024), with half allocated for supermarkets and the other half for authorized merchants.
• Doubling of utility rebates, covering about six months of utility costs for the lowest-income households.
• Various LifeSG credits to offset household expenses.
• Higher allowances for some pensioners.

3. Climate Change and Energy Security

• To meet energy demands and reduce carbon emissions, Singapore will explore nuclear power via small modular reactors.
• The Future Energy Fund will receive a S$5 billion top-up to accelerate research and adoption of clean energy.
• The Coastal and Flood Protection Fund will be increased by S$5 billion for building seawalls, barrages, and tidal gates.
• A major land reclamation project, Long Island in southeastern Singapore, will include new homes and parks.

4. Transition to Clean Heavy Vehicles

• A Heavy Vehicle Zero Emissions Scheme and Electric Heavy Vehicle Charger Grant will be introduced to provide incentives for clean heavy vehicle purchases and co-funding for charging infrastructure.

5. Stock Market and Corporate Tax Developments

• No major equity market incentives were announced, potentially disappointing investors.
• A S$1 billion Private Credit Growth Fund will be established to support financing for high-growth local enterprises.
• The Monetary Authority of Singapore (MAS) equities market review group proposed tax incentives to attract companies and fund managers to list on the SGX.
• Corporate income tax revenues surged to S$30.9 billion in 2024, 10.2% above estimates, with strong contributions from finance and wholesale trade sectors.
• Singaporean companies will receive a 50% corporate tax rebate in 2025, capped at S$40,000.

6. Fiscal Outlook: Expansionary but Balanced

• Singapore ended 2024 with a budget surplus of S$6.4 billion (0.9% of GDP).
• The 2025 budget remains expansionary, with total projected expenditure at S$123.8 billion (+9.6% YoY).
• Expected overall budget surplus: S$6.8 billion (0.9% of GDP).

  Thank you