Channel NewsAsia, 29 Apr 2012
Deputy Prime Minister and Minister for Finance and Manpower Tharman Shanmugaratnam has assured Singaporeans that the government is closely monitoring inflation including prices of everyday goods and services.
Speaking at the May Day dinner, he noted that inflation remains an important challenge and one that union leaders are most concerned about.
This year's May Day dinner comes at a time of continuing uncertainty in the global economy, caused especially by the problems in Europe, said Mr Tharman.
In Singapore however, he said the economy is not in a bad shape.
"Our unemployment rate remains lower than in most other countries. This is due to the very large number of jobs created last year. With the economic slowdown, we have seen a pick-up in redundancies since the last quarter of 2011, and can expect a slight increase in unemployment in the short term as displaced workers take some time to find new jobs," said Mr Tharman.
Singapore's Consumer Price Index (CPI) rose by about 5.2 per cent in March 2012 compared to a year ago and he said this is a high figure.
However, he also explained that this does not mean that the average Singaporean will feel this high inflation.
That is because more than half of the headline inflation rate of 5.2 per cent came from higher COEs for cars and the effect of higher market rent on houses.
Mr Tharman assured that the vast majority of Singaporeans who already own their homes and are not buying new cars will not feel the effects of these sharp increases.
Mr Tharman also said the increase in prices of daily necessities and essential services such as food and clothing have actually been much more moderate at three per cent or lower.
"The vast majority of Singaporeans, who already own their homes and are not buying a new car, will not feel the effects of these sharp increases. The increase in prices of daily necessities and essential services, such as food, clothing & footwear and education, has actually been much more moderate, at three per cent or lower. The inflation in actual household expenditures for most Singaporeans is hence lower than five per cent," said Mr Tharman.
He added: "Nevertheless, we are closely monitoring the situation, including prices of everyday goods and services. MAS has been strengthening the value of our dollar to reduce the impact of imported inflation. The government has taken actions to cool the property market. Although property prices are not part of the consumer price index, in an overheated property market, many other prices can also go up. We will keep a close watch on the property market.
"In the meantime too, the government is providing some help for Singaporean households to cope with the rising cost of living. This year, we introduced GST vouchers, which will help lower income Singaporeans and especially our older folk with their expenses."
Mr Tharman noted that the National Wages Council has been discussing the wage guidelines for 2012 and 2013 and he is sure that they will consider all factors carefully before making their recommendations, expected by June.
Mr Tharman hopes that the guidelines will allow workers to get their fair share from the growth over the past year and get wage increases that can be sustained while still ensuring that businesses in Singapore remain competitive and continue to generate good jobs.
What Govt is doing to tame domestic inflation
SINGAPORE'S inflation rate is currently high, but its impact on the majority is much less than suggested by the headline numbers ('What's the plan to blunt spike in domestic inflation' by Mr Ng Boon Chye; Thursday).
Of the 5.2 per cent increase in the consumer price index (CPI) last month, about 1.8 percentage points were accounted for by the increase in imputed rental costs of owner-occupied housing.
As the majority of resident households here own their homes, they do not actually incur rental expenditure.
Likewise, the sharply higher certificate of entitlement premiums for the first three months of this year affected around 8,000 new-car buyers, or a small proportion of resident households.
Nonetheless, inflation is currently higher than what Singapore has seen historically, and the Government and the Monetary Authority of Singapore (MAS) remain committed to bringing it down.
The MAS tightened its monetary policy stance further this month.
A stronger Singapore dollar not only caps imported inflation, but also moderates the external demand for our goods and services, thereby also reducing pressures of demand in the labour market and for other domestic resources such as space.
Over the medium term, this should ease domestic price pressures.
The Government has also implemented various macroprudential measures to cool the property market.
Although the CPI does not reflect property prices, the cooling of the property market should, over time, help to bring down other domestic costs.
In the meantime, the Government has also been providing households with cash transfers that help cushion the impact of rising costs.
Cindy Keng (Mrs)
Director
Corporate Communications Division
Ministry of Trade and Industry
Angelina Fernandez (Ms)
Director
Corporate Communications Office
Monetary Authority of Singapore
ST Forum, 28 Apr 2012
Deputy Prime Minister and Minister for Finance and Manpower Tharman Shanmugaratnam has assured Singaporeans that the government is closely monitoring inflation including prices of everyday goods and services.
Speaking at the May Day dinner, he noted that inflation remains an important challenge and one that union leaders are most concerned about.
This year's May Day dinner comes at a time of continuing uncertainty in the global economy, caused especially by the problems in Europe, said Mr Tharman.
In Singapore however, he said the economy is not in a bad shape.
"Our unemployment rate remains lower than in most other countries. This is due to the very large number of jobs created last year. With the economic slowdown, we have seen a pick-up in redundancies since the last quarter of 2011, and can expect a slight increase in unemployment in the short term as displaced workers take some time to find new jobs," said Mr Tharman.
Singapore's Consumer Price Index (CPI) rose by about 5.2 per cent in March 2012 compared to a year ago and he said this is a high figure.
However, he also explained that this does not mean that the average Singaporean will feel this high inflation.
That is because more than half of the headline inflation rate of 5.2 per cent came from higher COEs for cars and the effect of higher market rent on houses.
Mr Tharman assured that the vast majority of Singaporeans who already own their homes and are not buying new cars will not feel the effects of these sharp increases.
Mr Tharman also said the increase in prices of daily necessities and essential services such as food and clothing have actually been much more moderate at three per cent or lower.
"The vast majority of Singaporeans, who already own their homes and are not buying a new car, will not feel the effects of these sharp increases. The increase in prices of daily necessities and essential services, such as food, clothing & footwear and education, has actually been much more moderate, at three per cent or lower. The inflation in actual household expenditures for most Singaporeans is hence lower than five per cent," said Mr Tharman.
He added: "Nevertheless, we are closely monitoring the situation, including prices of everyday goods and services. MAS has been strengthening the value of our dollar to reduce the impact of imported inflation. The government has taken actions to cool the property market. Although property prices are not part of the consumer price index, in an overheated property market, many other prices can also go up. We will keep a close watch on the property market.
"In the meantime too, the government is providing some help for Singaporean households to cope with the rising cost of living. This year, we introduced GST vouchers, which will help lower income Singaporeans and especially our older folk with their expenses."
Mr Tharman noted that the National Wages Council has been discussing the wage guidelines for 2012 and 2013 and he is sure that they will consider all factors carefully before making their recommendations, expected by June.
Mr Tharman hopes that the guidelines will allow workers to get their fair share from the growth over the past year and get wage increases that can be sustained while still ensuring that businesses in Singapore remain competitive and continue to generate good jobs.
What Govt is doing to tame domestic inflation
SINGAPORE'S inflation rate is currently high, but its impact on the majority is much less than suggested by the headline numbers ('What's the plan to blunt spike in domestic inflation' by Mr Ng Boon Chye; Thursday).
Of the 5.2 per cent increase in the consumer price index (CPI) last month, about 1.8 percentage points were accounted for by the increase in imputed rental costs of owner-occupied housing.
As the majority of resident households here own their homes, they do not actually incur rental expenditure.
Likewise, the sharply higher certificate of entitlement premiums for the first three months of this year affected around 8,000 new-car buyers, or a small proportion of resident households.
Nonetheless, inflation is currently higher than what Singapore has seen historically, and the Government and the Monetary Authority of Singapore (MAS) remain committed to bringing it down.
The MAS tightened its monetary policy stance further this month.
A stronger Singapore dollar not only caps imported inflation, but also moderates the external demand for our goods and services, thereby also reducing pressures of demand in the labour market and for other domestic resources such as space.
Over the medium term, this should ease domestic price pressures.
The Government has also implemented various macroprudential measures to cool the property market.
Although the CPI does not reflect property prices, the cooling of the property market should, over time, help to bring down other domestic costs.
In the meantime, the Government has also been providing households with cash transfers that help cushion the impact of rising costs.
Cindy Keng (Mrs)
Director
Corporate Communications Division
Ministry of Trade and Industry
Angelina Fernandez (Ms)
Director
Corporate Communications Office
Monetary Authority of Singapore
ST Forum, 28 Apr 2012
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