SINGAPORE - Singapore's Budget for the financial year ending 2014 is expected to record a slightly smaller deficit than estimated a year ago, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said on Monday.
"We had budgeted for an overall deficit of $1.2 billion (or 0.3% of GDP). We now expect a very small deficit of $0.1 billion, close to a balanced position," Mr Tharman said in Parliament as he delivered the Budget statement.
The Ministry of Trade and Industry expects Singapore's Gross Domestic Product growth in 2015 to be between 2 per cent and 4 per cent.
"This is not different from the 2.9 per cent growth last year," he said.
Stressing that the global outlook for 2015 is uncertain - as the United States continues to recover, Europe's growth remains weak, and the Eurozone facing new uncertainties - Mr Tharman said emerging Asia, including our own region, is seeing the effects of a slowdown in China.
He added that the current global environment is not just a temporary challenge.
"We may see prolonged sluggish growth in the advanced world, as well as continued consolidation in China's growth as it reforms and rebalances its economy. We should not count on significantly stronger global demand over the medium term."
Consumer Price Index inflation fell to 1 per cent last year, largely due to the fall in COE prices and the correction in the property market which has reduced imputed rentals.
Even with rising food prices, especially raw foods imported from the region, Mr Tharman said overall inflation is expected to be close to zero in 2015.
On the labour market, Mr Tharman said Singapore is seeing close to full employment. The unemployment rate for citizens remained low at 2.9 per cent last year, he said.
The tight labour market has also led to further increases in labour force participation rates, with more women working and more older workers staying on in employment.
Meanwhile, incomes have continued to rise, outpacing inflation, Mr Tharman said.
The median Singaporean worker's pay grew by a slower 1.4 per cent in real terms last year. However, added up over the last five years, the median worker's pay grew by 11 per cent after adjusting for inflation. Median household income per member grew faster, at 18 per cent over the five years in real terms. This is because besides higher pay, more Singaporeans have jobs, Mr Tharman said.