Chart of the Day: Budget balance rose over 2 years

Thanks to contributions from the Statutory Board and stamp duties.

This chart from Morgan Stanley Research shows that Singapore's final budget balance has typically made positive surprises in the last two years.

In 2016, the budget balance registered a surplus of 1.3% of GDP, or $5.8b. The government expected it to be less than 1%. In 2017, another surplus of 2.1% of GDP, or $9.6b, was recorded. The government expected it to be less than 0.5%.

Morgan Stanley added that on the revenue front, operating revenue is expected to normalize in FY2018, declining by -3.3% YoY, compared to +9.0% YoY in FY2017.

Morgan Stanley Asia economist Zhixiang Su said, "In particular, policymakers highlighted that the higher-than-expected operating revenue in FY2017 was driven by the exceptional Statutory Board contributions, primarily from MAS, as well as increased stamp duty collections from the property market recovery."

In FY2018, policymakers expect lower revenue from Statutory Board contributions, vehicle quota premiums, and stamp duty. Meanwhile, the contribution from net investment returns (NIR) is expected to rise by +8.5% YoY, compared to +0.2% YoY in FY2017.

The government expects the FY2018 overall fiscal balance to register a mild deficit of $0.6b or -0.1% of the GDP.