SINGAPORE: Deputy
Prime Minister and Minister for Finance and Manpower Tharman
Shanmugaratnam has assured Singaporeans that the government is closely
monitoring inflation including prices of everyday goods and services.
Speaking
at the May Day dinner, he noted that inflation remains an important
challenge and one that union leaders are most concerned about.
This
year's May Day dinner comes at a time of continuing uncertainty in the
global economy, caused especially by the problems in Europe, said Mr
Tharman.
In Singapore however, he said the economy is not in a bad shape.
"Our
unemployment rate remains lower than in most other countries. This is
due to the very large number of jobs created last year. With the
economic slowdown, we have seen a pick-up in redundancies since the last
quarter of 2011, and can expect a slight increase in unemployment in
the short term as displaced workers take some time to find new jobs,"
said Mr Tharman.
Singapore's Consumer Price Index (CPI) rose by
about 5.2 per cent in March 2012 compared to a year ago and he said this
is a high figure.
However, he also explained that this does not mean that the average Singaporean will feel this high inflation.
That
is because more than half of the headline inflation rate of 5.2 per
cent came from higher COEs for cars and the effect of higher market rent
on houses.
Mr Tharman assured that the vast majority of
Singaporeans who already own their homes and are not buying new cars
will not feel the effects of these sharp increases.
Mr Tharman
also said the increase in prices of daily necessities and essential
services such as food and clothing have actually been much more moderate
at three per cent or lower.
"The vast majority of Singaporeans,
who already own their homes and are not buying a new car, will not feel
the effects of these sharp increases. The increase in prices of daily
necessities and essential services, such as food, clothing &
footwear and education, has actually been much more moderate, at three
per cent or lower. The inflation in actual household expenditures for
most Singaporeans is hence lower than five per cent," said Mr Tharman.
He
added: "Nevertheless, we are closely monitoring the situation,
including prices of everyday goods and services. MAS has been
strengthening the value of our dollar to reduce the impact of imported
inflation. The government has taken actions to cool the property market.
Although property prices are not part of the consumer price index, in
an overheated property market, many other prices can also go up. We will
keep a close watch on the property market.
"In the meantime too,
the government is providing some help for Singaporean households to
cope with the rising cost of living. This year, we introduced GST
vouchers, which will help lower income Singaporeans and especially our
older folk with their expenses."
Mr Tharman noted that the
National Wages Council has been discussing the wage guidelines for 2012
and 2013 and he is sure that they will consider all factors carefully
before making their recommendations, expected by June.
Mr
Tharman hopes that the guidelines will allow workers to get their fair
share from the growth over the past year and get wage increases that can
be sustained while still ensuring that businesses in Singapore remain
competitive and continue to generate good jobs.
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