Since news came out that Singapore's budget deficit for the year may be around $2.4 billion, there is a sense of panic in the air. This amount is three times larger than initially projected S$800 million deficit this year, so I guess a certain amount of tension can be expected; but I think Singaporeans need not worry too much.
We are in the midst of a global economic downturn with turmoil in almost all sectors of the world economy. Almost no country in the world is immune to the turmoil, and Singapore is no exception. With the tough economic climate, I think Singaporeans need to look at the big picture.
Singapore has a reserve of over $70 billion and our surpluses in 2007 are about $6.4billion. Compare to all that, $2.4billion isn’t that much. It is definitely something Singapore can handle. As such I think the Singapore government (and Singaporeans) should not worry so much about the deficit but more about helping Singaporeans in these tough economic times. Cost of living in Singapore is still high with a recent increase in power supply bills, the STI sliding down weekly and there is news of job cuts almost everyday.
The people will need help and the government will need to spend money to stimulate growth. All in all, a deficit of $2.4 billion isn’t all that bad. In fact, things will probably get worse before it get better.
There’s no need to panic.