China says inflation slows to 1.8% in July

BEIJING: Chinese inflation hit a two-and-a-half-year low in July, official data showed Thursday, giving the government further policy leeway to boost weakening growth.

The country's consumer price index (CPI) rose 1.8 percent year-on-year last month, the National Bureau of Statistics said, the fourth straight month of year-on-year easing and the lowest level since January 2010.

The slowdown potentially gives authorities more ammunition to light a fire under the world's second-largest economy, which grew 7.6 percent in the second quarter.

That was China's worst performance since the height of the global economic crisis in 2008-2009.

Authorities this year have taken measures including the rare step of slashing interest rates twice in quick succession while also lowering requirements for how much money banks must keep in reserve.

Chinese leaders, including Premier Wen Jiabao, have expressed concern over the weakness in the economy and have hinted that the government may need to take further action to bolster growth.

Helping suppress the overall consumer price index was an overall decline of 0.9 percent in prices for transportation and telecommunications, according to the data.

Inflation for the first seven months of 2012 was 3.1 percent, the bureau said.

$1 million worth of food vouchers for low-income families

SINGAPORE - NTUC FairPrice Foundation is giving $1 million worth of food vouchers to 20,000 low-income families and individuals.

They will receive the vouchers through all 87 Citizens Consultative Committees and selected welfare organisations.

The donation was presented to Deputy Prime Minister and Minister for Finance Mr Tharman Shanmugaratnam at a National Day dinner celebration organised by Taman Jurong Constituency for its residents today.

Mr Shanmugaratnam is also the advisor to Jurong GRC Grassroots Organisations.

Pointing out that low-income families are especially vulnerable to inflation, Mr Ng Ser Miang, Chairman for NTUC FairPrice Foundation and NTUC FairPrice hopes that the FairPrice Foundation's efforts will help these families defray the cost of daily essential needs.

"We hope that our efforts will bring some relief to them," he said.

In a written statement to the press, FairPrice said that it has been working with Grassroots Organizations and welfare organisations in assisting lower income families to meet their daily needs through the FairPrice Food Voucher scheme since 2002.

"Including the current donation, the FairPrice Food Voucher scheme has contributed $10 million worth of FairPrice vouchers to meet over 200,000 requests from the needy for financial assistance," it wrote.

The latest consumer price index (CPI) rose to 5.3 per cent year-on-year in June as indicated by a recent statement from the Department of Statistics.

Salaries of most low-wage workers rose in last 5 years

Wages of most low- wage employees in Singapore have picked up significantly over the past five years, despite the increase in the proportion of foreign workers in the workforce.

In Parliament yesterday, Minister of State for National Development and Manpower Tan Chuan-Jin cited statistics showing that the real incomes of Singaporean workers in the bottom 20 per cent - also referred to as the 20th percentile - rose 11.5 per cent from 2006 to last year.

At the 20th percentile, household income per member also grew by 13.6 per cent in real terms over the same period.

"This improvement at the household level reflected not just the rise in individual wages in the last five years, but also the fact that more members of the household have found employment in an economy that has created many new jobs," he said.

"The reality, therefore, is that we have not done badly in the last five years. Moreover, this is even before we consider the very significant and comprehensive support that we are providing to lower-income families."

Still, the cost of living in Singapore - where the consumer price index (CPI) is expected to remain at around 5 per cent in the next few months - bears monitoring, Minister for Trade and Industry Lim Hng Kiang said.

He said that the two largest contributors to CPI are rentals on owner-occupied accommodation, and car prices. This means that most resident households are unaffected, as they already own their homes. Similarly, only new car buyers will feel the pinch from the rise in certificate-of-entitlement prices.

Food-price inflation, meanwhile, remains at a "relatively low" 3 per cent, he said.

This is nowhere near the peak of 2008, when prices skyrocketed to close to 8 per cent due to poor weather conditions that resulted in a global supply shortage, he added.

Aside from keeping a close watch on inflation, Mr Tan said the Government is rolling out a "comprehensive and active strategy to help low-income families improve their overall quality of life and share in Singapore's continued progress".

While "the best thing the Government can do for low-income families" is to create good jobs, he said it has also given out grants to help low-income workers and their families own their flats, as well as education and health-care subsidies.

Mr Tan agreed with MPs Denise Phua and Sylvia Lim that more must be done to raise salaries in sectors where wages have lagged behind, such as cleaning, retail as well as food and beverage.

He said the Government will tighten accreditation frameworks, to raise standards and enable workers in these sectors to enjoy better employment terms.

Workers will benefit by receiving appropriate wages, commensurate with the higher training, standards and productivity required. Details are being finalised, he added.

"We are taking a balanced approach which involves deliberate intervention, to support restructuring, raise skills and ensure that our lower-wage workers get a fair share of productivity gains," said Mr Tan. "We are not leaving things to the market."

DPM Tharman: Average S'porean won't feel the sharp effects of inflation

The average Singapore will not feel the effects of a sharp inflation, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said today in a speech at this year's May Day dinner.

He acknowledged that the 5.2 per cent increase in the Consumer Price Index (CPI) for March 2012 compared to a year ago, was a "high figure".

But more than half of this inflation rate of 5.2 per cent comes from higher COE premiums on cars and the effect of higher market rents on homes, the Manpower Minister said.

So those who already own their homes and are not buying a new car will be unaffected.

In fact for most Singaporeans, inflation in actual household expenses is lower than 5 per cent.

Mr Tharman explained that the increase in prices of daily necessities and essential services, such as food, clothing and footwear, and education, has actually been much more moderate, at 3.0 per cent or lower.

Nevertheless the Government is closely monitoring the situation, including prices of everyday goods and services, Mr Tharman said.

Inflation remains an important challenge and it is also one that union leaders are most concerned about, he said.

The Monetary Authority of Singapore has been gradually strengthening the value of the Singapore dollar to reduce the impact of imported inflation.

Actions have also been taken to cool the property market as an overheated property market with inflated property prices, while by themselves not part of the CPI, can drive up other prices.