Electricity and gas bills, petrol costs, and food prices are expected to go up for the rest of this year and into 2019, according to the Monetary Authority of Singapore’s bi-annual macroeconomic review, that was released last Friday.
MAS, led by Deputy Prime Minister Tharman Shanmugaratnam, revealed that it expects the inflation rate here to rise to 2 per cent and stay at that rate for the last few months of 2018 and into the first half of next year.
The central bank also expects Singapore’s economy to grow at a slower pace for this same period and projects that the GDP will register within the upper half of the 2.5 to 3.5 percent foreccast range.
Several reasons have been cited for the incoming spike in prices. The price of food is expected to rise due to higher oil prices and weather concerns that is projected to affect food production.
The authorities have also cited that expectations for faster wage growth would lead to higher labour costs and in turn, lead to inflationary pressures.
The central bank has further said that it’s “more uncertain” economic outlook is shaped, in part, by the trade tensions involving the US. While trade tensions have had “limited impact” here so far, MAS projected that “negative spillovers are expected to impact the Singapore economy in the latter part of this year and beyond.”
The projected increase in electricity and gas bills, petrol costs, and food prices will come with the expected public transport fare hikes and the foreign domestic worker levy hike, which are expected to go into effect next year.
These cost increases come on the back of a hefty 30 per cent water price increase that was rolled out over the past 2 years, a cumulative nearly 20 per cent electricity tariffs increase over 2018 and the impending Goods and Services Tax hike that will see the GST rise to 9 per cent, sometime after 2021.
Earlier, the Government assured Singaporeans that they are working to address concerns the people, who find it increasingly difficult to contend with the ever-growing cost of living, have.
In August, Prime Minister Lee Hsien Loong touched on cost of living as he gave Singaporeans tips on how to manage the rising cost of living and offered that the people could turn off their mobile data and tap on wifi outside when they are not home to cut down expenses, among other suggestions.
A day after PM Lee’s rally speech, Second Minister for Finance Indranee Rajah threw her weight behind her party leader and said that the Government is committed to doing its part but the people also need to make the right choices. Urging the people to “think through what they are able to afford,” Rajah promised:
“The Government will do its part – that is our commitment. We want to make sure that Singaporeans are able to manage their cost of living, their daily expenses. But at the same time, we hope that people will also think through what they are able to afford and manage and also to make the right choices.”
Earlier this month, PM Lee echoed these sentiments as he said at a closed-door grassroots event, that the Government will address concerns over the cost of living: “It is both a matter of reassuring people that their immediate concerns are being seen to, that the cost of living is being taken care of, that we have measures that are helping them, helping specific groups of people with their concerns.”
PM Lee made that comment on 14 Oct. A mere 12 days later, MAS projected that the costs of more essential goods and services is expected to rise further.