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Budget 2024: Economist Anticipates Focus on Four Key Areas

Written by: Aayudh Sen

As Singapore gears up for its Budget 2024 announcement, anticipation and speculation loom large regarding the government's fiscal priorities for the upcoming year. Chief Economist at RHB, Barnabas Gan, sheds light on what he believes will be the focal points of this crucial economic blueprint. According to Gan, the budget is expected to strike a balance between short-term imperatives and long-term strategic goals, with emphasis placed on four key areas.

First and foremost, Gan anticipates a concerted effort to bolster Singapore's global competitiveness. Recognizing the ever-evolving nature of the international business landscape, Gan suggests that the government will likely introduce measures aimed at enhancing the sustainability capabilities of local businesses. This initiative, he suggests, will not only bolster the resilience of Singaporean enterprises but also position the city-state as a trusted hub for innovation, talent, and entrepreneurship on the global stage.

Moreover, Gan emphasizes the importance of workforce transformation in driving sustainable economic growth. He predicts enhancements to initiatives such as the Workfare Skills Support (WSS) scheme, designed to promote inclusivity among low-wage workers and encourage continuous upskilling and reskilling. Lifelong learning, Gan argues, must become a cornerstone of Singapore's workforce development strategy, particularly focusing on mid-career workers who require upskilling to adapt to the evolving demands of the modern economy.

Given the significant role played by Small and Medium Enterprises (SMEs) in Singapore's economy, Gan foresees targeted support measures to facilitate their digitalization and automation efforts. With SMEs comprising 99% of all enterprises and employing 72% of the workforce, initiatives aimed at enhancing their technological capabilities are deemed critical for driving productivity gains and fostering sustainable growth in the SME sector.

Lastly, Gan highlights the importance of addressing the cost of living challenges faced by lower and middle-income households. With inflationary pressures on the rise, Gan suggests that policymakers may consider augmenting existing support mechanisms such as the Assurance Package. This could involve enhancements to cash payouts, utility rebates, or even one-off special cash payments to alleviate the impact of recent GST rate hikes and rising utility expenses. Additionally, Gan suggests the possibility of further support through measures like additional CDC vouchers or a one-off top-up to the Post-Secondary Education Account (PSEA), aimed at providing additional relief to Singaporean households.

In summary, as Singapore prepares to unveil its Budget 2024, all eyes are on the government's response to the evolving economic landscape. With the insights provided by Chief Economist Barnabas Gan, it's evident that the budget is poised to address a spectrum of challenges while laying the groundwork for Singapore's continued economic resilience and prosperity in the years ahead.

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