Tharman approves 2026 Budget, warns of ‘long storm’ as Middle East war disrupts global economy
President Tharman Shanmugaratnam approved Singapore’s 2026 spending plans amid global uncertainty, warning of a “long storm” of instability driven by the Middle East conflict. He cited rising fuel costs, supply disruptions, and risks to food and key commodities.
- Tharman approves Singapore’s 2026 Budget amid rising global uncertainty
- Warns of “long storm” of political instability linked to Middle East conflict
- Strait of Hormuz closure raises fuel prices and disrupts global supply chains
SINGAPORE: President Tharman Shanmugaratnam has approved Singapore’s 2026 Budget and warned of a prolonged period of global instability, describing a “long storm” ahead as the Middle East conflict continues to disrupt global markets and supply chains.
In a Facebook post published on 18 March 2026, Tharman highlighted the closure of the Strait of Hormuz entering its third week as a major stress point for the global economy.
“Yet these economic problems are not the gravest challenge we face. We are looking at a long storm of global political instability,” he said.
Rising economic pressures from conflict
Tharman noted that continued disruption to one of the world’s most critical shipping routes would intensify inflationary pressures, particularly through rising fuel costs.
“For every week that the war continues and the Strait of Hormuz remains closed, the higher fuel prices will go and the longer they stay high,” he said.
He added that the conflict would also disrupt supplies of fertiliser and key industrial materials such as aluminium and helium, with cascading effects on global food production and prices.
These developments, he suggested, could deepen economic uncertainty beyond immediate energy concerns.
Singapore’s buffers and fiscal resilience
Despite the challenging outlook, Tharman pointed to Singapore’s longstanding fiscal discipline and strategic planning as key safeguards.
“We have built up reserves that will help us deal with major crises, as we have done before,” he said.
He added that national budgets have been structured to support long-term investments while maintaining financial prudence.
“We have Singapore Budgets that enable us to invest boldly in every needed skill and capability, and to preserve some finances for future needs,” he noted.
Tharman also emphasised Singapore’s global standing, saying trust from international partners allows the country to diversify trade and energy sources.
Emphasis on preparedness and national approach
In his remarks, Tharman reiterated the importance of maintaining what he described as the “Singapore way” in navigating uncertainty.
“That must remain the Singapore way. Always prepared for a world where things may not go as we hope. Investing in the future for every Singaporean. Contributing our part to the global good. And standing up for what we believe in – a fair, open and humane world order,” he said.
He stressed that preparedness for adverse scenarios must remain central to policymaking.
Budget debates highlight transparency concerns
Separately, the global uncertainty formed the backdrop to Singapore’s February 2026 Budget debates, where Members of Parliament called for prudence despite a stronger-than-expected S$15 billion fiscal surplus for 2025.
Workers’ Party chief Pritam Singh raised concerns about transparency in government spending, urging more rigorous evaluation of existing programmes before new initiatives are introduced.
He pointed to limited public tracking of major schemes, including the S$40 billion Forward Singapore initiative and the S$37 billion Research, Innovation and Enterprise (RIE) 2030 plan.
Pritam Singh calls for clearer accountability
Singh highlighted the absence of detailed reporting on how funds have been utilised and whether policy goals, such as job creation, have been achieved.
“I think there’s quite a lot of work to be done there. And I hope in this term of government we see a new approach from the PAP government,” he said.
He warned that insufficient disclosure could undermine public trust and weaken parliamentary oversight.
Singh also noted that the RIE 2030 programme lacks a clear breakdown of its S$37 billion allocation, unlike earlier plans.
Government response on improving transparency
Lawrence Wong acknowledged the concerns and agreed in principle with the need for improved transparency.
He pointed to existing mechanisms such as the biennial Public Sector Outcomes Review but recognised that data could be presented more clearly and accessibly.
Wong said ministries already conduct internal evaluations and pledged to share more information publicly.
“Hopefully that will encourage Singaporeans to also look at the information and have a better understanding of what we have achieved,” he said.
