During his Singapore Budget 2024 speech, DPM Lawrence Wong painted a mixed economic outlook for 2024. GDP growth in 2024 is expected to be between 1% and 3% – potentially higher than the 1.1% growth in 2023.
Underpinned by receding inflationary pressures, growth in major economies is expected to remain resilient this year. In turn, major central banks could adopt more accommodative stances to ease financial conditions and support demand.
However, key risks in the global economy persist. Rising geopolitical tensions, in particular, the wars in Europe and the Middle East, could escalate dangerously.
Here are 6 sectors that will be impacted by announcements made during Singapore Budget 2024.
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#1 Semiconductor
DPM Lawrence Wong noted that the global electronics industry is expected to recover. This will bolster growth in regional economies – benefitting Singapore’s key trading partners.
Singapore’s semiconductor sector accounts for 10% of the global semiconductor market, and 20% of semiconductor equipment.
While companies in Singapore do not produce cutting-edge chips, it has carved a niche in speciality chips and memory chips. These are critical enablers of automation, 5G technology and electric vehicles.
Singapore will have an opportunity to build on its existing strengths across the value chain – from design, wafer fabrication, assembly and testing.
#2 AI
Artificial Intelligence (AI) is a critical emerging technology. DPM Lawrence Wong said that AI is not just about ChatGPT, but “is a general purpose technology”.
Like electricity or the internet, it has the potential to transform a wide range of industries and enhance productivity across processes such as drug discovery, organising warehouses, or driving vehicles.
Singapore has set out plans to build excellence and attract private sector investments in its National AI Strategy 2.0. In support of this, DPM Wong mentioned that more than $1 billion will be invested over the next five years into AI computing, talent, and industry development.
This will ensure Singapore has access to advanced chips that are crucial to AI development and deployment, and attract leading companies in Singapore and around the world to set up AI Centres of Excellence here.
#3 Telecommunications
To support Singapore’s AI and immersive media ambitions, DPM Lawrence Wong also mentioned that upgrading our Nationwide Broadband Network is crucial.
Additional resources will be poured into increasing mass market access to broadband speeds of up to 10 Gigabits per second in the second half of this decade. This is 10 times faster than the broadband speeds in most homes today.
Read Also: 10 Things Businesses Need To Know About Singapore’s Budget 2024
#4 Green Energy
DPM Lawrence Wong cited geopolitical tensions, and the wars in Europe and Middle East, as key risks that may lead to disruptions in the global energy markets and supply chain. To this end, energy security is important to Singapore.
Today, Singapore uses natural gas – which is the cleanest of all fossil fuels. This will remain crucial for Singapore in the medium term. Plans for a second LNG terminal are in the works to meet our growing electricity needs.
Beyond this, Singapore has to explore other means of generating low carbon energy. DPM Lawrence Wong cited three potential energy sources: 1) Hydrogen (via a National Hydrogen Strategy); 2) Geothermal; and 3) Nuclear.
All of this will require catalytic investments from the Singapore Government. A Future Energy Fund, with an initial $5 billion injection, will be set up for this purpose. This will put Singapore in the position to move quickly on critical infrastructure investments.
#5 Finance
Singapore is already a key finance node in Asia – supporting businesses across the world. During the recent global uncertainties, Singapore has distinguished itself as a stable and trusted financial centre.
This has encouraged major financial institutions to do more out of Singapore, with a continued inflow of investments, capital, and talent. To ensure Singapore remains a competitive financial hub, a $2 billion top-up will be injected into the Financial Sector Development Fund.
In addition to doing more to enhance core capabilities in banking, capital markets, asset management, and insurance, it will also build capabilities in new areas like FinTech, as well as green and transition finance.
#1 Healthcare
Healthcare is also an important topic for every Singaporean. All adult Singaporeans aged 21 to 50 will get a one-time MediSave Bonus top-up of $300.
For older Singaporeans, born in 1973 or earlier, the Majulah Package will also provide a MediSave Bonus. Young seniors with less means will be given $1,500 MediSave top-ups, while others will receive $750.
Combined, this will provide a MediSave Bonus for about 3 million Singaporeans in 2024.
Read Also: Guide To The Majulah Package: Earn & Save, Retirement Savings Bonus, And Medisave Bonus
Furthermore, the per capita household income thresholds to be eligible for healthcare subsidy schemes will also be updated to support more Singaporeans. Such schemes include MediShield Life premium subsidies, CHAS subsidies for primary care, and subsidies for outpatient and inpatient treatments at our public hospitals.
This will benefit more than 1 million Singaporeans, and cost the Government around $300 million.
To support seniors in staying active and socially connected, the Government will also enhance the Age Well SG initiative. $3.5 billion will be set aside for such schemes over the next decade.
This will expand the network of Active Ageing Centres, and increase development of assisted living options such as Community Care Apartments and better home care arrangements.
Estate upgrading solutions providers is also set to benefit from “silver upgrades” to residential estates. These will include building and enhancing amenities like therapeutic gardens and barrier-free ramps, and senior-friendly home fittings such as wider toilet entrances and shower seats. This will also cover more sheltered linkways, bus stops with senior-friendly features, as well as safer and more pedestrian-friendly roads.
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