Singapore yesterday announced a S$1.5 billion (US$1.1 billion) package to shield lower-income households from surging costs of living, joining fiscal policymakers globally in blunting the pain of sustained price pressures.
The package, which includes direct payments and household utilities rebates, is targeted at providing relief to the most vulnerable groups, the Singaporean Ministry of Finance said in a statement.
It also consists of assistance to local businesses by way of increased wage credit and steps to support jobs, it said.
“There remains significant uncertainty on how prolonged or deep the challenges ahead will be,” the ministry said.
Singapore is not alone among Asian nations ramping up support, with regional authorities particularly focused on checking sharp gains in food prices.
Malaysia and Indonesia have resorted to export bans on commodities such as palm oil and chicken to keep local prices in check, while Thailand recently extended price caps for essential goods and proposed a profit-sharing arrangement with energy firms to fund fuel subsidies.
In February’s budget, Singaporean Minister of Finance Lawrence Wong (黃循財) announced the country’s third straight budget deficit as the government kept spending taps open to support the economy’s recovery from the COVID-19 shock.
Officials expect the total draw on Singapore’s reserves for COVID-19 pandemic aid to amount to S$42.9 billion over three fiscal years.
The package announced yesterday is to be funded using last year’s better-than-expected fiscal revenue, the ministry said, adding that there would be no further draw on past reserves.
The trade-reliant business hub has been particularly vulnerable to food and energy price surges caused by COVID-19-induced supply bottlenecks and Russia’s war in Ukraine.
The core inflation print for last month, to be announced tomorrow, is expected to surge further from a decade-high 3.3 percent in April, a Bloomberg survey said.
Singapore’s central bank expects core inflation to surge further over the coming months, with its most recent forecast predicting that core figures would average between 2.5 and 3.5 percent this year.
All-items price rises are expected to be between 4.5 and 5.5 percent.
The Monetary Authority of Singapore, which seeks to dampen imported inflation by bolstering the country’s currency settings against a basket of its top trading partners, has opted to tighten monetary policy settings three times in the past eight months, including a surprise move in January.
The measures announced yesterday stopped short of direct market intervention.
The ministry said that they are designed to “not distort price signals, as these are needed to guide our economic restructuring and transformation.”
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