How Singapore cushions rising costs from a prolonged Middle East crisis

Inflation forecast rises to 2%, according to Deputy Prime Minister Gan Kim Yong.

Though Singapore may not fully shield itself from the Middle East conflict, the government is providing $1b in support against rising energy costs whilst diversifying gas imports to other countries.

Deputy Prime Minister Gan Kim Yong said in Parliament on 7 April that the crisis is unlikely to be short-term, with inflation expected to rise to 2%, above the earlier projection of 1%.

Economic growth is also expected to slow in the coming quarters, despite a previous forecast of GDP at 2–4%.

Coordinating Minister for National Security K Shanmugam said Singapore has maintained crude oil supplies, with no fuel rationing needed at present.

Gas imports have been diversified to countries including Australia, the US, and Mozambique, and the government plans to expand solar energy, electricity imports, and explore other options such as nuclear power.

Acting Transport Minister and Senior Minister of State for Finance Jeffrey Siow announced that the government is rolling out almost $1b to help households, businesses and workers manage higher costs.

Businesses can expect the Corporate Income Tax rebate for Year of Assessment 2026 to be raised from 40% to 50%. Meanwhile, the Energy Efficiency Grant will be expanded to all sectors with support extended to 31 March 2028.

For households, the government will give out $500 CDC vouchers in June, earlier than the original January 2027 timeline. The 2026 Cost-of-Living Special Payment will also be raised by $200, bringing the total payout to between $400 and $600 per person.