Light at the end of the tunnel: SG fiscal deficit to narrow to 4.6% of GDP

A forecast of 6.3% growth in 2021 is also expected.

Fitch Solutions expected that the primary fiscal deficit will be narrowed to 4.6% of the gross domestic product (GDP).

In 2022, a primary fiscal deficit of 1.4% of GDP is also predicted. This is due to the normalisation of revenue and spending to pre-pandemic levels. 

Operating revenue is expected to hover around $78.3b, amounting to about 15% of GDP. This would be close to pre-pandemic levels of 14.7% in 2019. 

A low base in 2020, meanwhile, means that this would result in a 21.1% increase in revenue, which yields to a 6.3% 2021 GDP growth forecast.

Economy recovery, according to the release, is expected to continue with a real GDP growth forecast of 3.6%. Revenue growth is also expected to jump 5.6% to $82.7b, amounting to 14.9% of the forecast GDP in 2022. 

This could also result in a goods and services tax increase to 9% from 7%.