Singapore unaffected by Budget 2023: RHB

This year’s forecast for the economy of the Lion City remains at 3%.

Whilst a lot of Valentine’s goodies were revealed in this year’s budget, the budget can do little to move Singapore’s economy.

As of this date, RHB said it keeps its forecast for economic growth at 3.0%.

“We expect Singapore’s growth momentum to decelerate into the first half of 2023 before picking up in the second half of 2023. 

For inflation, RHB said it sees headline and core inflation will be at 3.0% and 2.8%, respectively. 

“We recognise that the balance of risks is tilted to the upside as inflation prints have surprised higher, especially in 2H22,” the analyst said.

Three key thrusts

But the budget presents benefits for businesses and households such as growing the economy, equipping workers, and developing social compact, RHB said.

The budget resolves household concerns about elevated inflation by augmenting overall private consumption through policies like enhancing the payout of the permanent GSTV scheme and introducing the Assurance Package, RHB said.

However, the monthly CPF salary ceilings will be raised progressively to $8,000 by 2026, suggesting that the take-home pay after the CPF deduction may decline. 

The budget will also focus on attracting and retaining investments, and revenue drivers such as higher stamp duties for higher-value properties, higher taxes for luxury cars, and increased tobacco excise duties. 

Other policies including additional support for lower-income families, supporting housing goals for Singaporeans, and cash aid for raising children, were also declared.