Singapore: Singapore Finance Minister Heng Swee Keat will aim to strike a delicate balance in Monday’s budget: preaching fiscal prudence while doling out more social spending ahead of elections that could come as early as this year.

While not expected to be as headline-grabbing as last year — when Heng flagged a hike in the goods-and-services tax — the 2019 budget will cover a range of familiar policy priorities. Infrastructure spending, more health-care support for a rapidly ageing population, and help for firms transitioning in a digital economy were top-of-mind for Heng in a Jan. 22 interview.

The global backdrop calls for more caution. Weaker demand and US-China trade tensions saw Singapore’s export-reliant economy grow at a slower pace than expected in the fourth quarter, data showed Friday.

“Expectations for a spending spree are high on past surpluses, likely elections and downside economic risks,” Mohammad Faiz Nagutha, an economist at Bank of America Merrill Lynch in Singapore, said before the data was released. Those expectations should be reined in since the economy “is not in a crisis,” he said.

The budget deficit could be smaller than projected thanks to improved tax collection. Nagutha sees a shortfall of 0.6 per cent of gross domestic product in the primary balance, versus the government’s 1.6 per cent estimate.

Here’s what else to look out for in the Singapore budget announcement:

Health Care

“Merdeka” will be the word of the day. That refers to a big portion of the population that came of age during Singapore’s independence era in the 1960s, and which the government plans to support through insurance subsidies, top-ups for medical savings programs, long-term care funding and other goodies.

Having already rolled out similar assistance for the elder Pioneer Generation in fiscal 2014, the larger Merdeka Generation of almost a half-million citizens could benefit from about S$8 billion ($5.9 billion) in fresh spending, according to an estimate by economists at Maybank Kim Eng Research Pte. in Singapore.

— Bloomberg