Higher transport, housing and food costs were identified as the main culprits contributing to the Singapore consumer pricing index increase of 3.1 percent. A DBS analyst said inflation should stay above 3% for the rest of the year before falling to 2% on weaker growth momentum in 2011.
Looking closer, we see housing cost rose not because of the cost of building houses, but higher electricity tariffs. Despite privatisation programmes and years of experience operating power plants, the authorities never seem to achieve any efficiencies to lower energy costs. Walk into any department store, and one can see prices of consumer goods have dropped significantly, thanks to open market competition and matured product cycles. A state-of-the-art plasma TV with wireless internet connectivity retails for less than half the asking price of not too long ago.
Prices of clothing and footwear rose 3.2% because of the sale of more expensive ready-made items following the Great Singapore Sale period. The equivalent basic apparels available at HDB heartland shops, the fast growing outlets of choice for penny pinching expatriates, are still being sold at basement prices.
Cars and petrol, as expected, spiked the cost of transport by 10.7 percent. COE prices have dipped recently, but they are still hovering at stratospheric heights. The Department of Statistics may never divulge the factor contributed by the thinly disguised distance-based fare hike, but this will certainly be hitting the pockets of more Singaporeans than the fewer owners of European cars and fancy sports jobs.
The good news is that if one has not been suckered into the upgrading scam, walks to the wet market for home cooking ingredients instead of eating out, and avoid the round the year Supersize Sales at Orchard Road tourist traps, your shrinking dollar will still go a bit longer. Just stay away from seafood for a while, somebody is probably still trying to recover from his $26 million binge at the baccarat table.
The bad news is that the inflation statistic will be used to adjust all sorts of government charges upwards. Think LTA, PUB, URA, HDB, MOE, MOH, et cetera, et cetera. The ministers have already made provision for a heftier paycheck in the annual budget, one self fulfilling prophecy forever carved in stone, at least for the present government. Notice these costs of governance never seem to go down when the inflation rate falls. Newton's law will be taught differently in schools. With the Youth Olympic Games ending a few days away on August 26, Singapore athletes may never get to bite into gold in the immediate future, but the Department of Statistics will certainly be awarded their medallion yet.