Commentary: Those revenge holidays of yours are driving up inflation

Best News Website or Mobile Service

WAN-IFRA Digital Media Awards Worldwide

Best News Website or Mobile Service

Digital Media Awards Worldwide

SINGAPORE: Even as complaints about higher prices are rising, it turns out that a key cause of inflation in Singapore is rampant consumer spending.

Indeed, the Monetary Authority of Singapore (MAS) said in its biannual macroeconomic review in October that spending on non-essentials likely was the biggest cause of inflation in 2022 and will be so for 2023.

While pent-up demand may have been understandable earlier in the year after the COVID-19 restrictions eased, unchecked buying at ever-higher prices hurts consumers. Its time to slow down the spending.

CONSUMER DEMAND DRIVES INFLATION

While high consumer demand can be a cause of inflation anywhere, its less common in Singapore. Often, MAS said, high demand for exports is the usual culprit.

Recently, however, its been different. Key drivers of inflation, MAS said in its October report, include firm demand amid the pickup in retail sales and return in tourism spending.