Quick Take Big Tech’s 2026 capital spending plans have blown past expectations , sparking a sharp market reaction. Investors still believe in AI — but they now want clear proof of returns , not just long-term promises. The CapEx Shock Across recent earnings, mega-cap tech companies pushed 2026 CapEx from “already massive” to “historically extreme” : Meta Platforms : US$115–135B vs US$110B consensus Stock jumped ~10% initially, but gains faded → investors want evidence, not AI rhetoric Microsoft : US$140–150B vs US$109B consensus Stock fell ~10% → ROI timing now under scrutiny Alphabet : US$175–185B vs US$115B consensus Shares slipped as markets adjusted to a more capital-intensive Google Amazon : ~US$200B vs US$146B consensus Stock dropped ~11% after-hours on cash flow concerns What Investors Are Really Worried About This is no longer about believing in AI — it’s about financial optics and timing . Key Market Fears CapEx is rising fa...
Quick Summary
Budget 2026 likely less generous, with fewer household handouts
Fiscal surplus expected at 0.3%–1.0% of GDP
Focus shifts to long-term growth, innovation and AI
Strong 2025 growth gives government room to be prudent
Why the Budget May Tighten
Singapore is expected to unveil a more fiscally conservative Budget 2026 on Feb 12, as policymakers balance resilient growth with long-term discipline after heavy household support last year.
Economists from Bank of America, Maybank and DBS forecast a budget surplus of 0.3% to 1.0% of GDP, signalling a pullback from 2025’s generous cash transfers.
Key shift: From short-term relief to future positioning.
Household Support Likely Reduced
Analysts expect:
Lower cash payouts after “elevated support” in 2025
Early fiscal prudence to preserve firepower in case growth weakens later in the parliamentary term
This follows Singapore’s rule to balance the budget over each parliamentary cycle, which restarted after the 2025 general election.
Growth Still Solid — But Slowing
2025 GDP growth: 4.8%, beating expectations
2026 outlook: 1.0%–3.0%, according to the Trade Ministry
Prime Minister and Finance Minister Lawrence Wong has warned that sustaining last year’s pace will be challenging amid global uncertainties.
Inflation & Monetary Backdrop
The Monetary Authority of Singapore recently:
Raised core and headline inflation forecasts to 1.0%–2.0%
Flagged continued AI-led investment momentum into 2026
Innovation, AI and Productivity in Focus
With land and labour constraints tightening, economists expect Budget 2026 to prioritise:
Technology and innovation investments
AI adoption and productivity upgrades
Support for high-value industries such as:
Quantum technologies
Decarbonisation
Space technologies
Singapore has already committed over S$1 billion to public AI research through 2030.
Jobs and Talent Watch
Citizen unemployment: 3.0% in 2025, a four-year high
Government may introduce incentives to encourage hiring, especially for youth
Tax Revenue a Bright Spot
Bank of America highlighted:
Corporate tax collections up 1–4% of GDP since 2023
Nvidia booked US$23.7B revenue in Singapore, up tenfold in two years
Continued investments by Google and Amazon in cloud infrastructure
Bottom Line
Singapore’s Budget 2026 is shaping up to be prudent, not generous.
With growth still resilient, the government appears ready to pull back broad handouts and double down on long-term competitiveness, particularly in AI, innovation and productivity.
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