Inflation rose the most for high-income groups in Singapore during first half of 2022

SINGAPORE, July 25 (The Straits Times/ANN): The highest income groups in Singapore saw the largest increase in consumer prices in the first half of 2022, compared to households from other income groups.

Those whose household incomes were in the highest 20 per cent bracket experienced a 6 per cent year-on-year increase in consumer prices during the period, according to data released by the Department of Statistics (SingStat) on Monday (July 25).

This is higher compared to the 4.2 per cent rise in prices experienced by the lowest 20 per cent, and 4.9 per cent for the middle 60 per cent.

This is because cars, petrol and other transport services, which have become significantly more expensive this year, had a larger impact on the spending of this group of top earners, compared to the other income groups.

Such items accounted for a bigger share of its expenditure basket, noted SingStat.

Across all households, the consumer price index (CPI) for all items increased 5.2 per cent year on year from January to June, higher than the 3.1 per cent increase in the second half of 2021.

Overall, the main contributors to the inflation rates for all three household income groups were cars, accommodation, food, petrol, electricity and other transport services.

However, households paid less for telecommunication services in the first six months of the year, compared with the same period last year.

For the period from July to December last year, CPI for all items rose 2.4 per cent year on year for the lowest income groups, 2.7 per cent for middle-income groups, and 3.7 per cent for the highest earners.

Assistant Professor of Finance Aurobindo Ghosh from Singapore Management University noted that while the percentage increase in consumer prices seen by the lowest-income groups (4.2 per cent) is lower than that for the middle-income groups (4.9 per cent), the impact felt by the lowest-income earners is still significant.

This is because the majority of the costs - about 57.5 per cent - for the lowest-income earners are on essentials such as food as well as housing and utilities.

In comparison, the middle-income groups spend about 47.9 per cent of their budget on food, and housing and utilities, Prof Ghosh added.

Food prices climbed 3.7 per cent year on year during the six-month period from January to July, and housing and utilities prices rose 4.6 per cent in the same period.

Inflation has been picking up here and around the world as the economy recovers from the Covid-19 lull.

Singapore's latest CPI for all items between January and June rose 5.2 per cent, higher than the 3.1 per cent rise in the second half of 2021.

Excluding rentals on owner-occupied accommodation, the CPI went up by 4.1 per cent year on year for the lowest 20 per cent income group, 5 per cent for the middle-income and 6.4 per cent for the highest income group. - The Straits Times/ANN