SINGAPORE – Food is expected to become more expensive in Singapore over the coming months as energy prices rise due to rising global food prices, supply chain bottlenecks and shortages labor force, Trade and Industry Minister Gan Kim Yong said.
In a written response to a parliamentary question from Mr. Shawn Huang (Jurong GRC) on Wednesday (November 3), Mr. Gan said that with energy prices set to rise further, food suppliers may have to adjust. prices to reflect cost increases.
The minister noted that the cost of food is affected by a combination of factors, including imported prices, freight, labor and seasonal weather changes.
Domestic food prices have increased over the past six months, and the prices of goods and services in general are expected to be pushed up by global inflationary pressures.
Singapore imports natural gas to generate electricity and also imports most of its food, so higher prices for these products globally will translate into higher prices domestically.
Mr. Gan said the government will continue to help Singaporean families in various ways to mitigate the impact of rising food prices.
It will also continue to diversify its import sources to maintain competitive prices and strengthen supply resilience, he added.
Minister of State for Trade and Industry Alvin Tan, in a separate response to Mr. Liang Eng Hwa (Bukit Panjang) and Mr. Saktiandi Supaat (Bishan-Toa Payoh GRC) on inflation, acknowledged during Question Time as the prices of goods and services were likely to go up.
He said the government recognizes this is a concern for Singaporean households, especially those in the lower income brackets.
Describing the government’s plan to deal with cost-of-living pressures, Mr Tan said low-income households will be supported with their daily expenses through programs such as Comcare and permanent GST vouchers, as well as one-off measures such as the 2020 budget grocery coupons.
He also described the government’s multi-pronged approach to managing cost pressures caused by supply constraints and the recovery of the global economy.
To keep prices from skyrocketing, he said, the Monetary Authority of Singapore (MAS) tightened its monetary policy by slightly increasing the slope of its policy range for the country’s weighted exchange rate, allowing the Singapore dollar to strengthen and make imports cheaper.
Mr. Tan said the MAS decision helps to dampen imported inflation and temper domestic costs, to ensure price stability in the medium term.
Mr Gan and Mr Tan’s remarks come as the all-item consumer price index – a measure of consumer price inflation – reached 2.5% in the third quarter of this year, from 2.3% in the previous quarter.
The MAS has forecast headline inflation to average between 1.5% and 2.5% next year.
Mr Tan said the government is also managing constraints on the supply side, which were already present before the Covid-19 hit but which have become more pronounced. The release of pent-up demand as economic activity picks up has further aggravated the situation, he said.
He added that the government is managing constraints, such as the supply of industrial and commercial space, to help moderate increases in business costs and reduce the knock-on impact on consumer prices.
He cited the rental relief paid to businesses during the pandemic to help them meet rental costs, as well as the salary credit program and the employment support program, as helping to cover the costs of labor. -work.
Tan said the government pays special attention to Singaporeans from low-income households. Those who have lost their jobs or suffered wage cuts due to the economic impact of the pandemic can also apply for financial assistance, he added.
Despite rising inflation, Singapore’s economic recovery remains on track and gross domestic product is expected to grow 6-7 percent for the full year barring global economic setbacks, Tan said.
Singapore’s domestic non-oil exports also grew 9.1 percent year-on-year in the third quarter of this year.
It was therefore important to keep markets open so that exports could act as a hedge against incoming price increases, he added.
“The government will continue to closely monitor inflationary and cost of living pressures, and adjust policies if necessary,” Tan said.