Delayed GST hike to spur private consumption

GST will be raised to 9%, but government has not specified when this will be implemented.

The delayed Goods and Services tax hike implementation will provide the necessary boost for the revival of private consumption with overall sentiment remaining positive for the year ahead, according to RHB Research.

Finance Minister Heng Swee Keat announced in his budget address that the GST will be hiked from 7% to 9% in the early part of 2021-2025 to support the government’s various infrastructure projects and social welfare programmes.

“We believe this is the right move, as any rise in private consumption would be offset by a declining labour force, an as-yet-uneven economic growth, and higher interest rates in the near term,” said RHB analyst Shekhar Jaiswal.

The revival in private consumption is also poised to be supplemented by the SG bonus paid out in $100-300 hong bao for every eligible Singaporean aged 21 and above.

“The delay in the GST hike, coupled with the deferment of a foreign workers’ levy increases for the marine shipyard and process sectors, indicate that the Government still has a bias on the dovish side as we enter the 10th year of the current growth cycle,” added Jaiswal.

For Singapore Business Review’s full budget coverage, click here.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia