The Government of Singapore now faces the biggest financial deficit it ever has since its independence from Malaysia in 1965. The value of the current debt is also remarkable when compared to Singapore’s second biggest deficit in 2001. The amount of the debt in question currently reaches 8.7 billion dollars.
The questions asked by businessmen, professionals, and academics in or out of the government generally revolve around the significance of such amount of debt, how such debt will affect the current budget of Singapore as well as its future spending, and how the government will react and respond to such phenomenon.
Tharman Shanmugaratnam, Singapore’s Minister of Finance, assured those concerned that the Singaporean government has enough savings that will support the economy in his recent Budget Speech.
Also, since Singapore does not need to borrow in order to fill such deficit, the effect of the debt will not be that significant as compared to other countries with similar debts. Singapore has always maintained prudence with regard to fiscal issues.
As a forecast from the economist, Shandre Thangavelu, the tight financial situation that Singapore is facing will continue until 2010.
One reason for these programmes, which are meant to stimulate the current fiscal situation of the country, will last until 2010. There are also funds needed for other programmes such as Skills Programme for Upgrading and Resilience or Spur.