A. Introduction

A. Introduction

Mr Speaker,

1. 1. I move that Parliament approves the financial policy of the Government for the Financial Year 1 April 2026 to 31 March 2027.
2. 2. This is our first Budget in this new term of Government. It comes as we enter a post-SG60 phase in our nation building journey.
3. 3. We begin this next phase at a time of profound global change.
   1. a. For nearly eight decades, the world benefited from an international order that supported stability and economic cooperation.
   2. b. The system rested, in large part, on the leadership of the United States. It underwrote global security, championed open markets, and helped form the institutions and rules that enabled shared prosperity across the world — including here in Asia.
   3. c. That era has now come to an end.
   4. d. The US is re-assessing, and in some areas undoing, key elements of the very system it once helped to build.
   5. e. Trade rules that were once promoted are being set aside. Global institutions are being bypassed. And long-standing norms are becoming less reliable.
4. 4. The cumulative effect is a weakening of the multilateral system. Countries everywhere have less confidence that common rules will protect their interests.
   1. a. As a result, more states are resorting to unilateral action, and some are becoming emboldened to do so.
   2. b. At the same time, the guardrails that once managed disputes and tensions are eroding.
   3. c. And so the world is becoming more contested, more fragmented, and ultimately more dangerous.
5. 5. Against this backdrop, last year, there was widespread expectation that the US Liberation Day tariffs would trigger a sharp global slowdown.
6. 6. Fortunately, our worst fears did not materialise.
   1. a. Many firms adjusted quickly — front-loading production and imports to get ahead of the tariff measures.
   2. b. Subsequent trade deals, together with shifts in global supply chains, helped to reduce the actual impact of the tariffs.
   3. c. As a result, growth in the major economies held up, supported in part by strong investment in AI-related activities.
7. 7. In short, despite mounting stresses, the global economy proved more resilient than anticipated, and the international system continued to function.
8. 8. This year, however, we may not be so fortunate. Events in just the first month of 2026 have already been of exceptional scale and consequence. They have increased geopolitical tensions worldwide. As pressures build and the margin for error narrows, the resilience of the global system will be tested far more severely.
9. 9. There are also clear and growing signs of fragility in the global economy. Rising public debt in many major economies will strain financial stability, and weigh on longer-term growth prospects. At the same time, heightened risk-taking in financial markets has pushed up asset valuations, leaving them vulnerable to abrupt corrections. Any such adjustment would dampen confidence, and spill over into real economic activity.
10. 10. These external developments have a direct bearing on us. Last year, the resilience of the global economy, combined with our own economic strength, resulted in better-than-expected growth of 5%. Strong external demand boosted key industry clusters, including electronics and biomedical manufacturing. These gains generated spillovers across the broader economy.
11. 11. Some of the positive momentum will continue into this year. But amidst heightened global uncertainties, we expect a more moderate outlook for 2026. Growth is therefore projected at 2% to 4%; with inflation at 1% to 2%.
12. 12. Despite these uncertainties, we can move forward with confidence — confidence grounded in fundamentals.
    1. a. Over the decades, we have systematically strengthened our economic foundations — deepening capabilities, investing in our people, and reshaping our industries as technologies evolve.
    2. b. We have built a reputation as a reliable and trusted hub — stable, secure, and well-governed — qualities that businesses and investors have come to value highly, more so now than before, precisely because the world has become more fractured and uncertain.
13. 13. All these give Singapore an important and tangible competitive advantage.
14. 14. But past success alone will not carry us forward. In a profoundly changed world, standing still is not an option. We cannot wait for conditions to turn more favourable. Nor can we fall back on strategies designed for a previous era.
15. 15. We therefore have a full agenda in this term of Government to refresh our strategies and strengthen our social compact. Budget 2026 is the first step in this effort, to secure our future in a changed world. It lays the groundwork for how we will navigate our next phase of development — together, as one people.
16. 16. In this Budget, we will:
    1. a. Advance our refreshed economic strategy.
    2. b. Harness Artificial Intelligence as a strategic advantage.
    3. c. Build a resilient and skilled workforce.
    4. d. Give families more support and greater assurance.
    5. e. Protect our security and sustainability.
    6. f. Renew and strengthen our Singapore spirit.
17. 17. I will touch on each of these in turn.