Singapore’s FY2012 budget, released on Friday, focused on medium-term issues rather than providing a near-term boost for the economy. The outlook for Singapore’s export-oriented economy is not as bad as it was ahead of the 2008-09 crisis, especially in light of the improvement in global data over the past few weeks. Nonetheless, we suspect that the world economy is likely to falter later this year. A global downturn would almost certainly prompt Singapore’s policymakers to introduce a sizeable fiscal stimulus package.