Massive 2015 budget deficit far exceeds analyst expectations

The $6.7b deficit represents 1.7% of the GDP.

The government yesterday declared a fiscal deficit of $6.7 billion, or 1.7% of the GDP, for Budget 2015.

The staggering figure far exceeded initial analyst forecasts. For instance, DBS had expected a deficit of $1.3b while Nomura had expected a deficit of 0.3% of the GDP.

Deputy Prime Minister Tharman Shanmugaratnam attributed the deficit to the $6b that the government is setting aside for future investments, particularly the $3b investment into the Changi Airport Development Fund.

The deficit also increased because of significant top-ups for the Special Employment Credit Fund, National Productivity Fund, and the National Research Fund.

“If we were to exclude these funds set aside for future investments, the Budget for FY2015 will in fact be quite close to balance,” DPM Tharman stated.