A positive fiscal surprise

The latest government financial statements for the fiscal year 2022 ended on March 31, 2023, which were released by the Ministry of Finance (MOF) on July 13, contained a positive surprise: Singapore’s overall fiscal position swung from deficit to surplus compared with the revised estimates presented in

Budget 2023

. While those estimates had projected an overall deficit of $2 billion, the actual outturn was a surplus of $1.7 billion. Although the $3.7 billion swing is only equivalent to around 0.6 per cent of gross domestic product, it is worth understanding why it occurred and its implications.

According to the MOF, the better-than-expected outturn was due to the underutilisation of Covid-19-related spending to the tune of $2.3 billion and higher revenues amounting to almost $1.5 billion, because of a stronger-than-expected economic rebound. According to an MOF spokesman, slightly over half of the underutilisation of spending was because the financial provisions made for schemes such as the Jobs Growth Incentive, subsidies for Enterprise Financing Scheme loans as well as aviation support and public health measures were not fully taken up.