It is understandable that the hike in water prices will generate greater public concern about rising costs of living. Already, COE prices have reached unprecedented levels, with premiums for larger cars surging past S$140,000 (US$102,000). Additionally, public transportation costs are set to rise, with bus and train fares for adults increasing by 10 to 11 cents per journey.
Moreover, Singapore residents have been experiencing a period of high inflation. Despite consumer prices rising at a slower pace for a fourth consecutive month in Singapore, core inflation is still at 3.4 per cent. This is well above the 2 per cent rate which the Monetary Authority of Singapore determines as consistent with overall price stability in the economy.
The average price of most products and services is still higher than that of the pre-pandemic period. Over the past three years, the global supply chain has experienced significant disruptions, with escalating geopolitical tensions and record-high commodity prices. These factors have collectively contributed to high inflation in Singapore.
At the same time, Singapore consumers’ purchasing power has not strengthened significantly. While 2022 saw nominal wages grow by 6.5 per cent – the largest increase in a decade, this growth was dampened by inflation, as real wages grew only by 0.4 percent, the smallest increase since 2012.
Economic forecasts suggest inflation will taper off in the second half of the year due to weakened global demand and the recovery of supply chains. However, with rising costs of transportation and utilities, there appears to be no indication of inflation abating to the man on the street.
