WHAT COULD RAISE INFLATION?
Being a little and opened economy, Singapore is very delicate to international price fluctuations. The Russia-Ukraine conflict and the supply chain disruptions that resulted in the rise in commodity prices were well-known outside factors that increased inflation in 2022 and 2023.
No one knows how the international situation may turn out for certain. However, it is obvious that any rise in Middle Eastern geopolitical tensions or a Russian-Ukraine war may increase shipping costs and prices of commodities and energy.  ,
Rising local labor costs, including income, can cause higher prices for goods and services in sectors with higher demand for workers ‘ products and services in Singapore, which in turn may increase inflation.
On a fundamental premise, there is proof of matching incompetence in Singapore’s employment market, leading to an upward bias on income. Big data and artificial intelligence are significant development sectors, but there is still a lack of expertise in these fields.
The typical Singaporean worker would normally prefer to get paid more, whether they worked in tech or any other field. The major, however, is persistence and sustainability. Major wage rises, if not matched by increases in productivity, did chance leading to a wage-price spiral and increase inflation. In the end, it will be bad for neither the business nor anyone else.
The good news is that significant progress has been made in the fight against prices. The terrible news is that success is still not yet known.
Your chicken rice prices may soon stabilize, but you should n’t count the chickens before they hatch.
Top scholar at UOB is Alvin Liew.