Comment: Should we be worried about a rise in the cost of living in 2022?

It comes after private house prices have risen by around 9% since the start of 2020, even though the economy has been hit by the pandemic. HDB resale values ​​are also on an upward trend.

Those who intend to invest in real estate will be affected, while Singapore citizens looking to buy their first property will face little to no impact.

MORE SUBSIDIES FOR THE NEEDS?

As we begin 2022, Singaporeans will look to Budget 2022, which is due to be announced in February, and all the steps it is expected to take to help stem the rising cost of living.

The government could provide more subsidies for necessities such as electricity, food and public transport. Another way to help would be to delay the increase in the goods and services tax (GST).

I would even take it a step further and say that it would help to reduce the GST by one to two percentage points for a year or two. To help make up for lost income, the government could increase the marginal tax rate in the highest income bracket.

Overall, the inflation rate in November 2021 is not something to worry too much about, but high inflation can indirectly lead to high interest rates, and those with loans should consider more. Carefully look at interest rates or refinancing options.

Citizens would also appreciate government grants to help cover costs.

Sumit Agarwal is Low Tuck Kwong Emeritus Professor of Finance, Economics and Real Estate at the National University of Singapore (NUS) Business School and Managing Director of the Sustainable and Green Finance Institute at NUS. He is also co-author of Kiasunomics and Kiasunomics 2. The opinions expressed are those of the author and do not represent the views and opinions of NUS.

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