* To boost support for households, healthcare

* Wong 'Cautiously optimistic' 2024 will be better year

* Cannot seek growth at all costs due to local limitations - Wong

* GDP growth for 2024 seen at 1%-3%

SINGAPORE, Feb 16 (Reuters) - Singapore's Finance Minister Lawrence Wong on Friday told parliament the 2024 budget would boost spending to counter inflationary pressures on households and businesses in the city-state as its economic outlook remains mixed.

The prime minister-in-waiting of one of the world's most expensive countries said he was cautiously optimistic 2024 would be a better year.

"While we expect the inflation situation to improve this year, there are uncertainties in the outlook," he said.

Wong said support for households would be topped up by another S$1.9 billion ($1.41 billion), while a S$1.3 billion support package would also be introduced for companies, including a corporate income tax rebate of up to S$40,000.

A new tax credit would be created to support high-value economic activities, manufacturing, research and development and green transition, and S$3 billion would be added to an R&D fund, as well as $$1 billion over five years for development of talent, industry and artificial intelligence.

"The best way to deal with inflation is to ensure firms, workers are more productive and that real incomes rise," he said.

Inflation in Singapore has fallen from its peak of 5.5% early last year but remains higher than pre-pandemic levels at 3.3% in December.

TAX CHALLENGE

The population of 5.9 million is also dealing with hikes in sales tax that started last year, and an upcoming scheduled increase in water tariffs. Wong said vouchers worth a total S$6 billion would be handed out to help with the sales tax hike.

Economists have projected the government's fiscal position would be expansionary, with DBS expecting an overall fiscal deficit of 0.4% of GDP, and UOB estimating a deficit of 1.2%.

Ahead of the budget, economists sought more details on the implementation of pillar 2 of BEPS 2.0, an OECD project under which more than 140 countries have agreed to bring the minimum effective tax rate of large corporates to 15%.

Wong said last year he intended to implement pillar 2 from 2025 but he would monitor the "fluid" international developments and adjust the timeline accordingly.

In Singapore, the current headline rate is 17%, but some investors pay an effective rate that is as low as 4%. Wong last year said BEPS 2.0 would give Singapore "less scope to use tax incentives to attract new investments."

Wong expected higher GDP growth at 1% to 3% this year after it plunged from 3.8% in 2022 to 1.1% in 2023.

But GDP was not everything, he said, and the government would not push for growth at all costs as there was a limit to how fast the country could grow due to financial constraints and issues over labor and land.

The government will also spend an additional S$300 million a year on healthcare support for its aging population.

Singapore, he said, would be an "economy that benefits the many rather than the few." ($1 = 1.3457 Singapore dollars) (Writing by Kanupriya Kapoor; Editing by Martin Petty)