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Singapore Inflation Rate In 2018: Here’s How Much Prices Of Everyday Goods And Services Have Increased

In the past 20 years, cost of Education has increased 90.0%, while cost of Health Care has increased 60.2%.

 

This article was updated on 31 May 2019.

We’ve all heard our parents and/or grandparents lament over how expensive things have gotten in Singapore over the years. The main culprit for this is the high rate of inflation in Singapore since our independence.

Even if we try to remain frugal in Singapore, we cannot go without daily necessities. The cost of daily necessities, like luxury goods and services, increases in tandem with the inflation rate in Singapore.

The Singapore Department of Statistics (SingStats) keeps a detailed record for price changes in goods and services that are important aspects of life in Singapore on a yearly basis. These include:

  • Food;
  • Clothing & Footwear;
  • Housing & Utilities;
  • Household Durables and Services;
  • Health Care;
  • Transport;
  • Communication;
  • Recreation & Culture;
  • Education; and
  • Miscellaneous Goods and Services.

What Was The Inflation Rate In Singapore In 2018?

In 2018, Singapore’s headline inflation rate for all items stood at 0.4%. However, the MAS Core Inflation Rate, which may be a more accurate representation for inflationary levels we experience in the country, came in at 1.7%. In comparison, the 2017 headline inflation rate and MAS Core Inflation Measure came in at 0.6% and 1.5% respectively.

The headline inflation rate measures the change in the Consumer Price Index (CPI) – All Items in Singapore, while the MAS Core Inflation Measure excludes two main expense categories: “Accommodation”, which is a subset of Housing & Utilities, and “Private Road Transport”, which is a subset of Transport. The main reason for the exclusion is that majority of people living in Singapore would not have to contend with expenses these categories very often or on a recurring basis.

Read Also: What’s The Difference Between Headline Inflation and Core Inflation?

We use these statistics to measure just how much the prices of every day necessities have increased over the years.

# 1 Food

Food is something we simply cannot go without regardless of how rich or poor we are, or how much prices have gone up or came down. According to SingStats, the price of food has increased by close to 1.4% in 2018.

As we can see, this is much closer to the MAS Core Inflation Measure than the headline inflation rate in 2018.

Looking further back, the price of food has increased 46.7% since 1998 (or in the past 20 years). This means that in typical cases, any food or food related service that used to cost $1.00 in 1998, will cost closer to $1.47 today.

Within the food category, we can also look at how prices have changed for individual food categories such as Bread and Cereal; Meat; Fish and Seafood; or Fruits. We can even look at how the prices of Fast Food and Hawker Food have increased in the past 20 years!

Interestingly, within the food category, the price of Meat has increased by close to 81.7% and prices of Milk, Cheese & Eggs have increased by 68.3%. Meanwhile, prices of Non-Alcoholic Beverages have increased 33.2% and prices of Sugar, Preserves & Confectionery has increased 36.2%.

This disparity shows that not all products within the same category would have risen by the same amount, and just looking at broad component figures may not provide as much insights as looking deeper.

We can also tell that food products that are easily packaged have risen by a far lower amount compared to fresh products.

Further, we can even see the price changes between Restaurant Food prices (which increased by 52.6%), Fast Food prices (which increased by 33.6%) and Hawker Food (including Food Courts) prices (which increased by 39.2%).

This tells us that fast food prices have increased by the lowest amount of the three categories. Some reasons for this could be because the industry may have experienced slower wage rises, higher efficiency, greater competition, or a more likely scenario is a combination of all three reasons.

# 2 Clothing & Footwear

The Clothing and Footwear segment crept up 1.4% in the past year, and only 6.8% in the past 20 years. This is one of the lowest increases compared to other major segments.

Some likely reasons for this could be the advent of e-commerce or cheaply sourced products from neighbouring countries.

# 3 Housing & Utilities

Expenses in Housing & Utilities declined nearly 1.3% year-on-year, but is up 37.1% since 1998. This is evident in the disparity between housing prices in 1997 compared to today, as well as utilities bills in 1998 compared to today.

This is also the component where MAS Core Inflation Measure disregards price movements in the “Accommodation” sub-category. Strictly speaking, “Accommodation” prices has declined 3.1% since last year, but increased 28.6% since 1998. In the other sub-category, Fuel & Utilities prices has spiked 10.4% in last year, and close to 68.9% since 1998.

# 4 Household Durables And Services

Household Durables and Services has increased nearly 0.8% year-on-year and over 17.5% since 1998. The main reason for this could be that products and services in this category are easily sources from cheaper neighbouring countries or can be bought via e-commerce.

# 5 Health Care

Health Care is a topic that every Singaporean is concerned about. In the past year, Health Care prices has increased by 2.0%, outstripping the MAS Core Inflation Measure. Over the past 20 years, average health care prices has soared 60.2%. This is second only to the inflation in Education costs.

Looking at the sub-categories, we can see that Medical Products, Appliances & Equipment contributed to an increase of just 0.2% in the past year (or 30.5% since 1998), while Medical & Dental Treatments contributed to 2.6% increase in the past year (or over 72.8% since 1998).

Read Also: Singapore’s Medical Inflation Rate Is At 15%: Why That Spells Disaster For Us

Again, this shows that anything that products which can be manufactured at scale or sourced from cheaper countries has experienced significantly milder price inflation compared to goods and services that cannot.

# 6 Transport

Transport experienced a deflation in 2018, with prices decreasing 0.5%. Since 1998, inflation in transport prices has been 33.1%

One main reason for its slower price growth in recent years could be down to the government having a large say in increases in Public Road Transport prices with the establishment of the Public Transport Council (PTC) and the taxi industry itself has seen intense competition as well as the fact that oil prices have eased since its highs in mid-2008.

In fact, Public Road Transport prices has declined over 1.0% since 2017. Since 1998, it has risen by 29.7%. Private Road Transport has similar declined 0.6% since 2017, but also increased by 30.4% since 1998.

# 7 Communication

Communication is the only category on this list that has actually experienced deflation in the past year, and, more incredibly, since 1998! This is truly extraordinary given the overall increase in the standard of living, and in fact, the advances in telecommunication services in the past two decades.

Deflation in Communication prices stands at 1.0% in the past year and 11.9% since 1998!

Some reasons could be overlap in internet technologies and social media, such as WhatsApp, Facebook and Skype, taking over many communication functions. Another reason could be that consumers have greater access to both free and subscription content online, compared to requiring licensed content or cable television.

# 8 Recreation & Culture

1-year Inflation in recreation and culture prices stands at 1.0%, while its 20-year inflation level stands at 15.6%.

# 9 Education

Inflation in the cost of Education was the highest in both the past 1-year and 20-year periods, increasing nearly 2.9% and 90.0% respectively.

This was mostly attributable to Tuition & Other Fees, which rose 2.9% and 91.4% in the past year and past 20 years, respectively. On the other hand, School Textbooks & Related Study Guides rose close to 0% in the past year and 50.3% in the past 20 years.

# 10 Miscellaneous Goods & Services

In this category, the inflation levels experienced was 1.0% in the past year and 42.9% in the past 20 years.

A sub-category, Alcoholic Drinks & Tobacco, increased 5.0% since last year and 129.2% in the past 20 years. Unsurprisingly, this sub-category which has been slapped with increased taxes over the years, far outstrips any single price inflation experienced in the other sub-categories in the past 20 years.

Inflation Over The Past 20 Years

On average, the MAS Core Inflation Measure rose by 1.7% in the past year and 36.7% in the past 20 years. This means that anything you could buy with $1.00 in 1998 is worth approximately $1.37 today.

 

No. Category Price In 1998 Approximate Price In 2018
1 MAS Core Inflation Measure $1 $1.37
2 All-Items $1 $1.35
3 Food $1 $1.47
4 Clothing & Footwear $1 $1.07
5 Housing & Utilities $1 $1.37
6 Household Durables And Services $1 $1.18
7 Health Care $1 $1.60
8 Transport $1 $1.33
9 Communication $1 $0.88
10 Recreation & Culture $1 $1.16
11 Education $1 $1.90
12 Miscellaneous Goods And Services $1 $1.43

 

 

Education and Health Care, two types of expenditure that many Singaporeans hold close to our hearts as we try to afford the best for our loved ones, have soared by the most. This could be a function of many things, including Singaporeans’ willingness to spend more of their wage increments over the years on these categories.

On the other hand, prices of goods and services in categories that have been impacted by the internet, including e-commerce, as well as manufacturing and sourcing from cheaper regions have increased by the lowest amounts.

Read Also: 4 Investments That Naturally Hedges Against Inflation In Singapore

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