Singapore’s inflation rate from 1987 to 2030
· Explore Singapore’s inflation trends from 1987 to 2030
· Understand key causes, global impacts, and domestic policy responses
What is inflation?
Imagine going to your favorite chicken rice stall everyday, and you pay $3.25 every time you eat. One day, the hawker says that from tomorrow, it will cost $4.00. You might think, “oh no, this is inflation!”
· Is it really inflation? It's not – here are reasons why the price went up:The stall became super famous (for exapmple, it won a food award)
· The hawker is using better ingredients
That one stall raising prices has nothing to do with inflation. Inflation happens when:
· Many chicken rice stalls raise prices.
· Prices of other essentials like groceries, clothes, mobile devices, and services also increase.
If the prices skyrocket but your salary remains stagnant, this is inflation.
The Monetary Authority of Singapore (MAS) is the body that keeps inflation steady at a low rate for the city-state. MAS ensures prices are not too volatile so people and businesses can plan their economic activities.
What causes inflation?
Many factors lead to inflation, pushing prices up. Milton Friedman, a legacy economist, describes inflation as “too much money chasing too few goods.”
There are two main reasons for inflation: first, cost-push inflation (costs go up). In this scenario, goods and services become expensive to produce and deliver.Second, demand-pull inflation (people desire more). Here, people have money and want to spend more, but there is a mismatch in supply of goods.
Summary table
Type of inflation What happens Real-life examples with numbers
Cost-push Production costs rise → prices go up Electricity +20%, cement +15%, us fare +₹10
Demand-pull People spend more → prices go up Travel demand +30%, hotel prices +₹1,000/night
What happened with inflation in Singapore?
According to Consumer Price Index (CPI) data, Singapore experienced low inflation for four decades (1981–2021), with prices rising by an average of just 1.8% per year. Howeer, in 2022, inflation surged to 6.1%, the highest level since 2008. Core inflation rose by 4.1% annually, marketing a significant shift in living costs.
The spike in inflation can be traced back to the COVID-19 pandemic in 2020. During lockdowns, people stayed home, saved money, and spent less. However in 2021, with the rollout of vaccines, demand rebounded quickly, yet supply chains lagged behind. Many factories, industries, and retail outlets had not fully resumed operations, resulting in a mismatch between demand and supply.
Global suply chain disruptions further exacerbated the problem. Factory shutowns and shipping delays caused widespread shortages. Compounding this, the Russia-Ukraine war affected these countries’ supply of oil, gas and fertiliser, causing energy and food prices to spike.
Singapore’s domestic economy also rebounded. After contracting in 2020, it grew 8.9% in 2021. People resumed eating out, shopping, and traveling. However, labour shortages, especially among foreign workers, meant many businesses struggled to meet surging demand, pushing wages higher.
As a highly import-reliant economy, with around 90% of its food and energy sourced externally, Singapore was especially vulnerable to global price shocks. This exposure meant inflationary pressures were felt more quickly and intensely compared to other countries. Singapore’s inflation story is a reminder that in a highly connected world, global events can hit home fast, but smart policy and long-term resilience help weather the storm.