Singapore's Lawrence Wong unveils 2026 budget focused on AI and financial market growth

Singapore’s Prime Minister Lawrence Wong laid out a spending plan on February 12 that puts artificial intelligence and financial market growth as the country’s future, as the government eyes a smaller budget surplus this year compared to last.

The government expects to end the coming financial year, which starts in April, with a surplus of SG$8.5 billion. That is well below the SG$15.1 billion surplus recorded in 2025.

Wong said last year’s figure was higher than anticipated as the economy grew faster than forecast, bringing in more corporate tax money, along with stronger sales of private vehicles and properties that pushed vehicle tax and stamp duty collections up.

A smaller but steady surplus

Even with a lower surplus, the government says it is on solid ground. The projected surplus works out to roughly 1% of the country’s GDP, enough to fund targeted programmes without drawing on the country’s reserves. Singapore has only drawn on those reserves twice before: once during the 2008 global financial crisis and again during the COVID-19 pandemic.

With trade tensions and rapid technological change shaking up industries, Wong said the 2026 budget is focused on making Singapore more competitive over the long run.

A large part of that plan centres on getting more companies and workers to use AI. Wong announced the creation of a “national AI council” that he will personally chair. “AI is a powerful tool, but it is still a tool. It must serve our national interests and our people,” he said. The council will oversee four focus areas: advanced manufacturing, connectivity, finance, and healthcare, with the aim of pushing Singapore toward becoming a leading AI hub.

Singapore will establish a national AI council | Source: @MOFsg

To help businesses make the shift, the government is launching a “Champions of AI” programme. It will offer tailored support to companies looking to use AI to change how they operate, covering both business transformation and staff training. Wong said companies that succeed under the programme would set standards for their industries and push others to follow.

Firms can also benefit from an expansion of the Enterprise Innovation Scheme, which already gives businesses a 400% tax deduction on qualifying costs. AI spending will now count under the scheme, though there is a cap of SG$50,000 (about $39,654) per year for 2027 and 2028.

On the worker side, Wong said every Singaporean can take steps to learn AI skills. The government will redesign its SkillsFuture website to make it easier for people to find AI courses that match their job needs and skill level. SkillsFuture gives Singaporeans credits to sign up for courses starting at age 25. Wong also acknowledged that while basic AI tools are free, more advanced features often come with a price tag. To help with that, people who complete selected AI training courses will get six months of free access to premium AI tools. “This will allow them to practice, experiment, and apply what they have learnt,” he said.

Boosting the stock market

On the financial markets side, the government announced it would add SG$1.5 billion (about $1.18 billion) to the Financial Sector Development Fund. Set up in 1999, the fund hands out grants to build Singapore up as a global financial centre.

The new injection follows a SG$5 billion Equity Market Development Programme announced in 2025. That programme has helped the Straits Times Index climb 22.67% last year, its best annual performance since 2009. Of the original SG$5 billion, SG$4 billion has already been placed with nine asset managers, with the rest due to follow in the second quarter of 2026.

The government also plans to make it easier for fast-growing companies to list on the stock exchange and to set up a dual-listing link between the Singapore Exchange and Nasdaq.

“These measures will enhance the depth and vibrancy of our public equities market and provide more pathways for enterprises to grow and scale from Singapore,” Wong said.

Join a premium crypto trading community free for 30 days - normally $100/mo.