AFTER turning in an eye-popping $15 billion basic budget deficit this year, the Government may have to run an even bigger shortfall next year.

Revenue looks certain to fall amid less tax being collected, yet ministries will be ramping up their spending to help bolster the economy.

And if the recession turns out to be even longer and deeper than forecast, 2011 might see a fourth deficit in a row, economists said.

This means that the Government may have to rely heavily on the returns it gets from investing Singapore's reserves in order to keep its books more balanced over the next few years.

These returns are known as net investment returns, or NIR. They comprise 50 per cent of the interest, dividends and expected long-term real returns on the reserves.

NIR is added to the Government's basic surplus or deficit - calculated as its operating revenue minus total expenditure and special transfers - before arriving at the overall budget position.

NIR contributions are projected to come in at $7.7 billion this year, helping to halve the basic deficit of $15 billion.

After allowing for all the special transfers, the overall deficit will be $8.7 billion - still a record amount of red ink for Singapore.

Read the full report in Thursday's edition of The Straits Times.