Friday February 08, 2008

PM Lee : Singapore government will help mitigate food cost inflation

channelnewsasia.com :

Prime Minister Lee Hsien Loong has assured Singaporeans that the government will help mitigate the rising costs of food. Speaking at the Teck Ghee Lunar New Year celebrations, Mr Lee said revenues have been strong and the government will be distributing help - especially to the poor and elderly - in the upcoming Budget debate. But Singaporeans must also make necessary adjustments. Mr Lee said: "I expect the inflation to be higher this year than last year, especially in the first half of this year. Last year, the inflation was about 2%. This year, it may be 5%, it may be even more."

Singapore is not the only country experiencing rising food prices. Prices in China and India are also going up, due to affluence and more consumption demand. Adverse weather conditions in Australia and China are also sending food prices upwards. Some measures that the government will undertake to ease the situation are to diversify the country's food sources and encourage consumers to switch to house brands, which are cheaper and give better value.

Mr Lee said: "Most importantly, we need to grow the economy so that incomes will go up." The prime minister added that being an open economy that imports all its food, Singapore cannot simply control the prices of food essentials as this will hurt the retailers and suppliers, resulting in shortages and queues. Mr Lee said while the government will help, Singaporeans must also do their part to work together to keep the country strong and competitive.

- This is not the first time that the Singapore government has talked about inflation. It is really quickly becoming a political issue. They can talk about this being a global problem, and how the rise in commodity prices especially in soft commodities and grains are driving up food prices, but do not forget that the root cause remains the same here, and everywhere : the growth in the money supply increasing at a faster rate than the growth of the economy.

See also :

1. Singapore CPI inflation hits new 25-year high of 4.4% in December
2. Singapore : Inflation rate could push past 6% in Q1 2008
3. NTUC chief urges Singaporeans to be prepared to live with higher fuel, food prices

(2008-02-08 17:41:49 SGT) [Biz] Permalink

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