'Long storm of global political instability': President Tharman approves Budget 2026 amid 'bracing times'

President Tharman Shanmugaratnam on Wednesday (March 18) warned of "bracing times" beyond global economic and financial strains, which he said has extended into a "long storm" of global political instability.

He made these comments in a Facebook post as he approved the Government's record $154.7 billion spending plan for Budget 2026.

Pointing to the ongoing conflict in the Middle East, now in its third week, the President cautioned that a protracted war and closure of the Strait of Hormuz will increase the risk of a major economic downturn and higher inflation.

He explained that fuel prices will continue to climb if the Strait of Hormuz remains closed. This, he said, will go beyond the oil and gas markets, to affect other sectors such as fertiliser.

A reduction in fertiliser supply, in turn, will impact food supply and prices, and supplies of other critical commodities such as aluminium and helium — which the world depends on.

Producers in the Gulf account for about 8 per cent of the world's supply of aluminium in 2025. 

Meanwhile, Qatar, which produces about one-third of the world's helium, has seen its production disrupted as Iran struck the Ras Laffan industrial city, where its helium facilities are located.

"It adds up to a major new stress point in the global economy and financial markets that were already under strain," Mr Tharman said.

But these are not the "gravest challenge", he added, noting what he called a "long storm of global political instability".

"We have seen in recent years growing resort to wars and destruction, disregard for the United Nations Charter, and discounting of international humanitarian law, which was established to protect ordinary people in the conflicts.

"It is a more fragile world." 

Strategic buffers and being a trusted country

Turing to the reserves built up over the years, Mr Tharman said that these "strategic buffers" will help Singapore to deal with major crises, as the city state has done before.

"We have Singapore Budgets that enable us to invest boldly in every needed skill and capability, and to preserve some finances for future needs.

"And we are trusted by countries around the world, which opens up new opportunities for mutual benefit, and enables us to diversify our trade and sources of energy," the President added.

He reminded Singaporeans that being a country trusted by other countries can open up new opportunities for mutual benefit.

This will in turn enable Singapore to diversity its trade and sources of energy.

"That must remain the Singapore way," he said as he urged Singaporeans to prepare for a world where things may not go as intended: "Investing in the future of every Singaporean. Contributing our part to the global good. And standing up for what we believe in — a fair, open and humane world order."

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editor@asiaone.com