A couple of weeks ago, Singapore’s Finance Minister Lawrence Wong announced the 2024 Budget. As with other countries, immediate social spending and investment was prioritised as a response to the ongoing cost-of-living crisis and challenges relevant to long-term productivity and population ageing.
However, there is a stark contrast between the city-state and other major developed economies. Singapore has net zero debt, and it has already solved the long-term fiscal issues facing other countries.
Singapore's government gross debt level is 170% of GDP. But this is offset by high levels of domestic savings in both the public and private sectors. The city-state is a capital exporting country that generates reserves from its large financial assets and public investments.
A large portion of the public sector comprises large government-linked companies – such as SMRT Corporation and Singapore Airlines – and its sovereign wealth funds – including the Government Investment Corporation (GIC) and Temasek Holdings.
GIC has around US$770 billion in assets under management and Temasek has US$290 billion. In combination this is around 270% of Singapore’s GDP.