PUBLISHED ONFebruary 26, 2026 8:40 AMBYKhoo Yi-HangSingapore experienced better-than-expected growth in the past year, but Singaporeans are still facing cost of living pressures, Prime Minister Lawrence Wong said rounding up the three-day debate on his Budget 2026 statement in Parliament on Thursday (Feb 26).
He said that Singapore's economy saw growth exceeding 5 per cent last year, which was more than what was projected.
"The data may show improvement, but lived experience and realities do matter," he said.
"So the question is this, what more must we do to ease cost pressures and ensure every Singaporean can continue to progress?"
He explained that the first step is understanding why affordability and cost concerns have surfaced, which is something not unique to Singapore.
Citing the Covid-19 pandemic and war in Ukraine, PM Wong said that inflation has moderated since, but price levels remain higher.
To deal with this, the Government has provided more than $10 billion through the Assurance Package, he said.
Budget 2026 also features CDC vouchers, cash support, rebates, Child LifeSG credits and CPF top ups for seniors.
"These are meaningful sums, and they are on top of substantial, broad-based subsidies for essentials like education, health care and housing, as well as targeted support for lower income families and workers," PM Wong added.
In his hour-long speech, he also stated that data at the household and individual worker levels indicate "incomes have risen faster than inflation over the past decades across the entire income distribution".
Meanwhile, spending has increased in dollar terms, but expenditure as a share of income that has either remained stable or fallen across income distribution.
Meanwhile, spending has increased in dollar terms, but Singaporeans are spending less as a portion of their incomes.
This means that Singaporeans are spending less as a share of their income, with expenditure on food, public transport and education declining.
However, healthcare is the exception, with Singaporeans spending more of their income on healthcare and health insurance.
This is reflective of Singapore's rapidly ageing population, the prime minister said.
"As you get older, you will tend to spend more on health care, and that's why we provide significant and growing subsidies for health care services and for our national health insurance premiums."
He added: "We will continue to ensure that health care remains affordable in Singapore. No Singaporean will be denied the health care they need because of an inability to pay. That is our assurance."
@asiaone Prime Minister Lawrence Wong made his speech at the end of the three-day debate on Budget 2026. #sgnews #singapore #parliament #budget #economy ♬ original sound - AsiaOne
Frequently consumed services such as the food & beverage (F&B) industry have experienced rising costs, faster than general inflation, PM Wong said.
"Food consumption may form a smaller share of income… but we experience the higher prices each time we order something or we dine out, and the psychological impact is immediate and visible," he explained.
Within the F&B industry and other domestic services like healthcare, Singapore hopes to increase wages in these sectors.
But increasing wages would mean greater costs — while some countries keep wages low to keep prices low, European economies have high wages and higher overall prices that becomes supported by a larger welfare state, financed by taxpayers.
"There is no free lunch," PM Wong stated. "Someone has got to pay this, so Singapore is forging our own path."
At present, the Government takes on a significant portion of the cost of essential services with subsidies and transfers, alongside support for lower- and middle-income households in Singapore.
"This balance has delivered good and affordable services to Singaporeans at a sustainable cost," he said, adding that this is still "a work in progress".
"The macro data may be reassuring, but as many members have highlighted, the lived realities differ from household to household, and the circumstances will vary for specific segments — different families face different pressure points."
PM Wong also addressed concerns surrounding artificial intelligence (AI) and how it is reshaping the economy, acknowledging that workers and fresh graduates are anxious about the possible displacements that may come with this "major technological wave".
"What we have seen in Singapore so far is that AI can augment jobs and help workers achieve more even as it automates certain tasks," he said.
PM Wong explained that the ideal pathway that the Government encourages Singaporeans to take is one where workers can move up the value chain by harnessing AI.
@asiaone In his Budget wrap-up speech on Thursday (Feb 26), Prime Minister Lawrence Wong assured Singaporeans that artificial intelligence will not replace their jobs, but enhance their skills and expertise. #sgnews #Singapore #Parliament #Budget #OurBudget2026 #SGBudget2026 #Businesses #Jobs #Workers #ArtificialIntelligence ♬ original sound - AsiaOne
He also reassured that the labour market "remains resilient" amid the growth of AI, with a growth in proportion of permanent employees and vacancies still outnumbering job seekers.
"So thus far, the evidence does not point to widespread displacement, but as many members have highlighted, there are emerging pressures, and we recognise that.
"We cannot rely only on today's data — we must prepare for tomorrow," he said.
Highlighting possible perils ahead due to companies leaning too heavily on AI or older workers finding difficulty re-entering the labour market, PM Wong also said that the Government is alert to these risks.
He promised to act early to prevent such outcomes and invest "more deliberately and more systematically in our people", helping companies apply AI to enhance human skills and expertise.
Achieving this may not be easy due to the inherent differences across sectors, PM Wong admitted, adding that the National AI Council will be key in coordinating efforts to use AI in uplifting workers.
"That is our assurance, and that is why our strategy going ahead is clear.
"We will not have jobless growth in Singapore. We will exploit AI to grow the economy, and we will ensure that growth translates into good jobs and better wages.
"That is how we give every Singaporean confidence to progress in the future."
In his roundup speech, PM Wong also addressed topics regarding planning for Singapore's long-term resilience.
He said that the fiscal forecast deviations are within a reasonable range, comparable to other advanced economies, and that these forecasts has been and will be "responsible and professional".
@asiaone In his Budget wrap-up speech on Thursday (Feb 26), Prime Minister Lawrence Wong explained why it is "oversimplified and inaccurate" to suggest that a fiscal surplus means the Government is taking more from the economy while leaving households and businesses to bear a deficit. #sgnews #Singapore #Parliament #Budget #OurBudget2026 #SGBudget2026 #Businesses #households ♬ original sound - AsiaOne
Addressing plans for the future amid "economic headwinds" and a contested geopolitical environment, PM Wong further stated that Singapore is entering with "considerable strength, a strong economy, a cohesive society" and "sound public finances".
"These are not accidental achievements. They are the result of decades of hard choices made by generations of Singaporeans.
"This budget builds on that strong foundation. It is a collective commitment that we will do what it takes to thrive in a more demanding world, that we will stand together when pressures mount and we will continue pushing forward to seize new opportunities on the horizon.
@asiaone In his Budget wrap-up speech on Thursday (Feb 26), Prime Minister Lawrence Wong opened his speech by setting the context on how each Budget "builds on the last" and sets up the next. #sgnews #Singapore #Parliament #Budget #OurBudget2026 #SGBudget2026 ♬ original sound - AsiaOne
"The world may be more uncertain, but we are prepared. We are united and together, we will shape our own destiny and secure a brighter future for every Singaporean."
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