Singapore's government will use its latest budget to boost an economy at risk of technical recession, steering away from the recent focus placed on social spending sweeteners in one of the world's most expensive cities.
Since 2012, Singapore's ruling People's Action Party (PAP) has concentrated its firepower on alleviating livelihood concerns, with measures aimed at addressing the widening income gap, under-investment in public housing and over-burdened transportation infrastructure.
The steps were "a wake-up call for the incumbent party after suffering its lowest public approval ratings in the 2011 general elections," observed Francis Tan, economist at United Overseas Bank (UOB).
But when new finance minister Heng Swee Keat reveals the 2016-2017 annual budget on Thursday, he's expected to address ways to lift gross domestic product (GDP) growth from a six-year low in 2015. With both manufacturing and services sectors on the decline, Singapore could enter a technical recession in the first half of 2016, according to major banks.
"The FY15 Budget theme was 'building our future, strengthening social security,' but the FY16 budgetary focus will clearly shift back to strengthening the economy by helping companies overcome challenges," summarized Selena Ling, economist at OCBC.
That means policies will be directed at helping local companies improve revenues and cushion labor market risks, according to widespread consensus.