Here’s why analysts think Singapore isn't addressing short-term pains with its fiscal programme

It’s focussing on long-term goals, analysts say.

The city-state’s fiscal programme for 2016-17 all but illustrates the fact that Singapore remains focussed on its long-term goals despite short-term growth pains.

According to a report by BMI Research, Singapore’s economy has been performing well below its long-term growth rate for the past two years, with the 2.0% real GDP expansion in 2015 representing the city-state's slowest rate of growth since 2009.

Rather than abandon its long-term goals, the report notes that the government has instead adjusted its annual spending programmes in order to provide additional support for small businesses, as well as productivity-enhancing research and investment.

“FY2016/17's budget was notable for a distinct lack of one-off demand-side stimulus spending in the face of slow economic growth,” the report added.

“The government decided not to renew its one-off income tax rebate from FY2015/16, opting instead to enhance its Corporate Income Tax Rebate to 50% (capped at SGD20,000) from 30% previously. This measure in particular is a nod towards supporting the small and medium-sized enterprises (SMEs) which have been hardest hit by rising wages and a tight labour market,” the report said.