Inflation pressure is becoming a serious concern for Singapore

The core year-on-year inflation rate hit 2.1 per cent in December 2021 despite the Government’s efforts to bring down prices. This is the fastest rate Singapore has experienced since 2013 and 2014. Price is expected to worsen due to an increase in demand post pandemic, and a reduction in the workforce resulting from border restrictions. Companies facing higher operating costs in the last two years might start to pass the charges to consumers due to an improvement in the economic outlooks. Meanwhile, consumers could also start hoarding because of inflation expectation, driving the prices up more.

Higher cost of living implies a major purchasing pressure for Singaporeans, especially for the low-income groups. A large proportion of their household expenditure is spent on food and essential items, which causes a constraint on their budget. For higher-earning population, housings and cars become much more difficult to afford. Utilities and energy prices are also at record highs, as production activities increase, which are expected to last for another three years.

However, economists anticipate the situation to get better. The global energy prices and bottlenecks in global transportation will ease gradually. Singapore Government also provides handouts and income support for the low-income households to cover basic needs, with additional aids for residents in housing, education and healthcare. In general, workers benefited from real wage growth with a rise in real median income last year.

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https://www.straitstimes.com/singapore/politics/managing-the-pressure-of-rising-prices-0