Singapore unveils US$802 million package to cushion pain from cost of living crisis

The package includes an additional payment of up to S$200 for 2.5 million adult Singaporeans, just under half of its population, to be disbursed in December.

The package, which comes on top of the additional S$1.5 billion in support announced in June, is geared towards those in the lower and middle income bands.

While price gains have generally eased, with the core inflation gauge tracked by the city state’s central bank dropping to the lowest level in 15 months, rising costs such as electricity tariffs and a proposed increase in public transport fares and water prices are set to pinch consumers.

The ministry in a statement said that while inflation had come down from its peak, “households are still dealing with the impact of price increases in various areas”.

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Economists are generally expecting the central bank to keep monetary policy settings unchanged in a scheduled review next month, on a weak growth outlook and still-elevated but easing inflation.

The ministry narrowed its GDP growth forecast to 0.5 per cent to 1.5 per cent this year from 0.5 per cent to 2.5 per cent previously. The economy grew 3.6 per cent in 2022.

“Economic growth has been sluggish, but we do not expect a recession this year. However, the risks are weighted on the downside, and there could be disruptions to food and energy supplies globally,” Deputy Prime Minister and Finance Minister Lawrence Wong told a news briefing, in remarks shared by the government.

Singapore has been providing help through budget and off-cycle measures.

Earlier this year, the Energy Market Authority had capped wholesale power prices from July 1 after they jumped as much as 3,000 per cent this year despite sharp drops in the cost of liquefied natural gas, the nation’s main fuel. Still, consumers are somewhat protected, as they are charged at a fixed quarterly rate.

Additional reporting by Bloomberg