While most sectors in Singapore are recovering from the COVID-19 pandemic, including tourism and aviation, the war in Ukraine has “clouded our outlook”, Mr Lee said.
The pandemic disrupted supply chains and necessitated large spending packages in developed countries, which stoked inflation. The war has also exacerbated this.
With oil and gas supplies from Russia disrupted, energy prices have been pushed up. The price of grain has also spiked as supplies from Russia and Ukraine – two major exporters – cannot be shipped out.
To combat the rising cost of living in Singapore brought about by these challenges, the Government is “doing everything necessary to support Singaporeans, especially middle- and lower-income families”, Mr Lee said.
Illustrating this, the Prime Minister said that a middle-income family with two young children, staying in a four-room Housing Board (HDB) flat, can expect an additional S$2,200 in support this fiscal year.
A lower-income family staying in a three-room HDB flat, meanwhile, can expect about S$3,700 in support.
“This will not cover fully every cost increase, but it will help lighten the burden on Singaporean households,” Mr Lee said.
“And if the situation worsens, we stand ready to do more.”
Mr Lee noted that the Monetary Authority of Singapore has also tightened the country’s exchange rate policy, making overseas travel more affordable and reducing the prices of imported goods, in Singapore dollar terms.
While some economic issues can be attributed to the pandemic and the war, Mr Lee said that conditions have also “fundamentally changed”.
He described several trends that are bringing costs up and pushing up inflation, including in Singapore. Among them are: The slowing of China’s growth and exports; countries raising tariffs against each other; and countries reviewing their supply chains.
“We don’t have much influence over this global inflation picture,” Mr Lee said.
“But what is within our power is to make ourselves more productive and competitive.”
To do this, Singapore must “press on with economic upgrading and restructuring; redouble our transformation efforts; (and) encourage workers to upgrade their skills at every opportunity”, Mr Lee added.
Read the full story here: Government ready to do more if cost of living rises further, says PM Lee