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Singapore Inflation Rate In 2020: Here’s How Much Prices Of Everyday Goods And Services Have Increased

·12-min read

This article was updated on 30 May 2021.

We’ve all heard our parents and/or grandparents lament over how expensive things have gotten in Singapore over the years. The main culprit for this is inflation – the higher the inflation, the more expensive things become compared to the previous year.

No matter how frugal we may try to be, we will see ourselves gradually spending more as inflation will increase the prices of even the most basic daily necessities.

The Singapore Department of Statistics (SingStats) keeps a detailed record for price changes in goods and services that are important aspects of life in Singapore on a yearly basis. These include:

  • Food;

  • Clothing & Footwear;

  • Housing & Utilities;

  • Household Durables & Services;

  • Health Care;

  • Transport;

  • Communication;

  • Recreation & Culture;

  • Education; and

  • Miscellaneous Goods & Services.

What Was The Inflation Rate In Singapore In 2020?

In 2020, Singapore’s headline inflation rate for all items actually declined 0.2%. Similarly, the MAS Core Inflation Rate, which may be a more accurate representation of inflation levels we experience in the country also declined 0.2%. This actually means that Singapore experienced deflation in 2020 – where prices declined on average rather than increased.

In comparison, the 2019 headline inflation rate and MAS Core Inflation Measure came in at 0.6% and 1.0% respectively. The deflation rate may also be a function of the challenging economy Singapore endured on the back of the COVID-19 pandemic.

Just because a deflation was reported does not mean that prices of everything declined. In reality, this just meant that prices declined on an aggregate basis, but there could have been categories of expenses that didn’t decline or even increased in price.

The headline inflation rate measures the change in the Consumer Price Index (CPI) – All Items in Singapore, while the MAS Core Inflation Measure excludes two main expense categories: “Accommodation”, which is a subset of Housing & Utilities, and “Private Road Transport”, which is a subset of Transport. The main reason for these exclusions is that majority of people living in Singapore would not have to contend with expenses these categories very often or on a recurring basis.

Read Also: What’s The Difference Between Headline Inflation and Core Inflation?

We looked into these statistics to measure just how much the prices of every day necessities have increased over the years.

#1 Food (increased 1.9% in 2020; increased 49.6% since 2000)

Food is something no one can go without regardless of how much prices have gone up or came down. In 2020, the price of food actually increased by close to 1.9%. This was despite the overall deflationary environment during the year.

Looking further back, the price of food has increased 49.6% since 2000 (or in the past 20 years). This means that in typical cases, food and food related service that used to cost $1.00 in 2000, will cost closer to $1.50 today.

Not all products within the food category itself will increase at an even pace. By looking deeper into the statistics, we can also look at how prices have changed for individual food items such as:

  • Bread and Cereal (increased 1.9% in 2020; increased 51.5% since 2000);

  • Meat(increased 5.5% in 2020; increased 69.5% since 2000);

  • Fish & Seafood (increased 1.0% in 2020; increased 53.4% since 2000);

  • Milk, Cheese & Eggs(increased 1.9% in 2020; increased 76.7% since 2000);

  • Oils & Fat (increased 1.8% in 2020; increased 55.5% since 2000);

  • Fruits (increased 1.7% in 2020; increased 61.6% since 2000);

  • Vegetables (increased 5.0% in 2020; increased 54.3% since 2000);

  • Sugar, Preserves & Confectionery (increased 5.2% in 2020; increased 44.9% since 2000);

  • Non-alcoholic Beverages (increased 3.6% in 2020; increased 41.2% since 2000);

  • Other Food (increased 1.3% in 2020; increased 44.3% since 2000)

Prices of Meat rose 5.5%, Vegetables rose 5.0%, and Sugar, Preservatives & Confectionary rose 5.2%, at a much higher level of food inflation rate in 2020. This was likely due to disruption in demand or higher demand in 2020 on the back of COVID-19. Looking at the past 20 years, we can actually see that fresh products tend to increase at a faster pace than packaged products, such as Sugar, preservatives & Confectionary and Non-alcoholic Beverages.

Even within these sub-categories, prices are further broken down. We can even review how much prices of noodles, chilled mutton, frozen fish, formula milk, leafy vegetables and soft drinks have changed.

We can also look at how the prices of Restaurant Food, Fast Food and Hawker Food have increased in the past 20 years! These rose at a slower rate than the overall food inflation level in 2020. However, over the past 20 years, food prices at restaurants have increased at a much faster pace compared to Fast Food and Hawker Food.

  • Restaurant Food (increased 1.5% in 2020; increased 55.7% since 2000)

  • Fast Food (increased 1.4% in 2020; increased 35.7% since 2000)

  • Hawker Food (increased 1.3% in 2020; increased 41.7% since 2000)

#2 Clothing & Footwear (decreased 3.9% in 2020; increased 4.9% since 2000)

The Clothing and Footwear segment declined 3.9% in the past year, and only increased 4.9% in the past 20 years. This is one of the lowest inflation rates compared to other major expenditure components.

In 2020, prices of clothing and footwear actually fell 3.9%. This may be due to the shift in working arrangements to work-from-home, which require less office wear. Tighter safe management measures has also restricted social events, and casual wear and/or formal wear. Over the past 20 years, some likely reasons for prices increasing at just one-tenth of the inflation rate could be down to the proliferation of e-commerce or cheaply sourced products from overseas.

  • Clothing (decreased 3.7% in 2020; increased 6.1% since 2000)

  • Footwear (decreased 5.0% in 2020; increased 0.5% since 2000)

  • Other Articles & Related Services (decreased 0.7% in 2020; increased 6.8% since 2000)

Categories are also further broken down. For example, within the clothing category, Men’s Clothing declined 4.5% in 2020, while Women’s Clothing declined just 3.6% and Children’s Clothing declined 2.6%.

#3 Housing & Utilities (decreased 0.3% in 2020; increased 33.3% since 2000)

Expenses in Housing & Utilities declined nearly 0.3% year-on-year – very close to the MAS Core Inflation rate. Since 2000, it has risen 33.3%.

This is also the component where MAS Core Inflation Measure disregards price movements in the “Accommodation” sub-category. Strictly speaking, “Accommodation” prices has increased 0.4% since last year, and has risen 32.0% since 2000. In the other sub-category, Utilities & Other Fuels prices has dipped 5.5% in last year, and rose 30.8% since 2000.

  • Accommodation (increased 0.4% in 2020; increased 32.0% since 2000)

  • Utilities & Other Fuels (decreased 5.5% in 2020; increased 30.8% since 2000)

Of note, within the Utilities & Other Fuels category, Electricity prices dipped 9.2% – likely on the back of consumers switching to OEM. Interestingly, this is despite more people likely working from home during the year.

Read Also: [2021 Edition] Complete Guide To Choosing The Best Open Electricity Market (OEM) Plan For Your Home

#4 Household Durables And Services (increased 0.3% in 2020; increased 19.5% since 2000)

Household Durables and Services has increased nearly 0.3% year-on-year. This is higher than the overall inflation rate, and likely due to more expenditure on household-related equipment and furniture as people spent more time at home during the year. Over the longer-term, this category of expenses rose 19.5% since 2000, or about half the overall inflation rate in the past 20 years. The main reason for this slower price climb in the past two decades may be that products in this category are easily sourced from cheaper neighbouring countries or can be bought via e-commerce.

#5 Health Care (decreased 1.5% in 2020; increased 57.5% since 2000)

Health Care is a topic that every Singaporean is concerned about. In the past year, Health Care prices decreased by 1.5%. However, over the past 20 years, average health care prices has soared 57.5%, outstripping the general inflation rate in Singapore.

  • Medicine & Health Products (decreased 1.4% in 2020; increased 28.5% since 2000)

  • Outpatient Services (decreased 3.5% in 2020; increased 64.0% since 2000)

  • Hospital Services (increased 1.5% in 2020; increased 76.1% since 2000)

  • Health Insurance (increased 0.0% in 2020; category not calculated since 2000)

Outpatient Services decreased 3.5%, likely as fewer people required to see the doctor for less serious medical conditions. Hospital services, though, still continued to inch 1.5% up. Over the past 20 years, these two expenses have surpassed the general rate of inflation in Singapore.

Health Insurance is a newly carved expenditure that the government is looking into, and only have figures from 2004. Since 2004, it has increase 15.0%.

Read Also: Singapore’s Medical Inflation Rate Is At 15%: Why That Spells Disaster For Us

#6 Transport (decreased 0.7% in 2020; increased 29.0% since 2000)

Transport experienced a deflation in 2020, with prices declining 0.7%. This may have been due to work-from-home being more prevalent during the year. Since 2020, inflation in transport prices has been 29.0%, which is also less than the overall inflation rate in Singapore.

One main reason for its slower price growth over the longer-term could be down to the government having a large say in increases in Public Road Transport prices with the establishment of the Public Transport Council (PTC) and the taxi industry itself has seen intense competition with the entry of ride-hailing services.

  • Private Transport (decreased 1.4% in 2020; increased 24.6% since 2000)

  • Public Transport (increased 3.1% in 2020; increased 33.6% since 2000)

  • Other Transport Services (decreased 3.1% in 2020; increased 4.2% since 2000)

During the year, Private Transport prices declined, perhaps due to less driving required to travel to work and for work-related purposes. Within the category, petrol declined 7.3%, while motorcycles actually increased 17.6%. This shows that there was demand for motorcycles despite the pandemic.

Public Transport, on the other hand, increased 3.1%. This is because Bus and Train fares rose 7.0% despite the pandemic, while point-to-point transport (taxi and ride-hailing services) inched 1.0% down.

#7 Communication (increased 0.7% in 2020; decreased 8.1% since 2000)

Communication is the only category on this list that has actually experienced deflation since 2000! This is truly extraordinary given the overall increase in the standard of living, and in fact, the advances in telecommunication services in the past two decades.

  • Postage & Courier Services (increased 2.5% in 2020; increased 30.7% since 2000)

  • Telecommunication Equipment (decreased 1.5% in 2020; decreased 66.8% since 2000)

  • Telecommunication Services (increased 0.8% in 2020; increased 3.1% since 2000)

Postage & Courier Services have increased 30.7% in the past 20 years – perhaps on the back of an increase in overall demand. On the other hand, Telecommunication Equipment has plunged 66.8%. Telecommunication services have increased just 3.1% in the past 20 years, despite the leap in technology and service standards in the telecommunication space.

#8 Recreation & Culture (decreased 1.8% in 2020; increased 14.7% since 2000)

Not surprisingly, most categories of recreation also experienced a deflation in 2020.

  • Recreational & Cultural Goods (decreased 0.8% in 2020; decreased 31.6% since 2000)

  • Recreational & Cultural Services (decreased 0.2% in 2020; increased 22.1% since 2000)

  • Newspapers, Books & Stationery (increased 0.5% in 2020; increased 37.1% since 2000)

  • Holiday Expenses (decreased 3.0% in 2020; increased 37.8% since 2000)

# 9 Education (decreased 0.6% in 2020; increased 80.7% since 2000)

Inflation in the cost of Education was the highest in the past 20-year periods, increasing 80.7%.

  • Tuition & Other Fees (decreased 0.6% in 2020; increased 81.3% since 2000)

  • Textbooks & Guides (increased 0.4% in 2020; increased 52.5% since 2000)

This was mostly attributable to Tuition & Other Fees, which rose 81.3% in the past 20 years. On the other hand, School Textbooks & Related Study Guides rose 52.5% in the past 20 years.

# 10 Miscellaneous Goods & Services (decreased 1.2% in 2020; increased 37.2% since 2000)

In this category, the inflation levels declined 1.2% in the past year, also perhaps on the back of tighter safe distancing measures. In the past 20 years, this category has experienced an inflation of 37.2%.

  • Personal Care (decreased 0.5% in 2020; increased 10.0% since 2000)

  • Alcoholic Drinks & Tobacco (decreased 1.0% in 2020; increased 109.0% since 2000)

  • Personal Effects (decreased 5.0% in 2020; increased 0.6% since 2000)

  • Social Services (decreased 2.9% in 2020; category not calculated since 2000)

A sub-category, Alcoholic Drinks & Tobacco, decreased 1.0% since last year but over the past 20 years, has increased 109.0%. This is somewhat unsurprising as this sub-category has been slapped with increased taxes over the years, far outstrips any single price inflation experienced in the other sub-categories in the past 20 years. Despite this, it suffered from the pandemic and experienced a deflation in 2020.

Inflation Over The Past 20 Years

On average, the MAS Core Inflation Measure rose by 1.7% in the past year and 36.7% in the past 20 years. This means that anything you could buy with $1.00 in 1998 is worth approximately $1.37 today.

No.

Category

Price In 2000

Approximate Price In 2020

1

MAS Core Inflation Measure

$1

$1.35

2

All-Items

$1

$1.34

3

Food

$1

$1.50

4

Clothing & Footwear

$1

$1.05

5

Housing & Utilities

$1

$1.33

6

Household Durables And Services

$1

$1.20

7

Health Care

$1

$1.58

8

Transport

$1

$1.29

9

Communication

$1

$0.92

10

Recreation & Culture

$1

$1.15

11

Education

$1

$1.81

12

Miscellaneous Goods And Services

$1

$1.37

Education and Health Care, two types of expenditure that many Singaporeans hold close to our hearts as we try to afford the best for our loved ones, have soared by the most. This could be a function of many things, including Singaporeans’ willingness to spend more of their wage increments over the years on these categories.

On the other hand, prices of goods and services in categories that have been impacted by the internet, including e-commerce, as well as manufacturing and sourcing from cheaper regions have increased by the lowest amounts.

Read Also: 4 Investments That Naturally Hedges Against Inflation In Singapore

The post Singapore Inflation Rate In 2020: Here’s How Much Prices Of Everyday Goods And Services Have Increased appeared first on DollarsAndSense.sg.

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