Vulcann 6th Gear May 9, 2012 Share May 9, 2012 Ok our DPM cum IMF Chairman of International Monetary & Financial Comittee mentioned this recently: CNA: http://www.channelnewsasia.com/stories/sin...1198179/1/.html Govt closely monitoring inflation: DPM Tharman Posted: 29 April 2012 1843 hrs ↡ Advertisement Link to post Share on other sites More sharing options...
Vulcann 6th Gear May 9, 2012 Author Share May 9, 2012 (edited) Then the authorities followed-up: From ST Forum http://www.straitstimes.com/STForum/Story/...ory_793342.html COST OF LIVING What Govt is doing to tame domestic inflation Published on Apr 28, 2012 SINGAPORE'S inflation rate is currently high, but its impact on the majority is much less than suggested by the headline numbers ('What's the plan to blunt spike in domestic inflation' by Mr Ng Boon Chye; Thursday). Of the 5.2 per cent increase in the consumer price index (CPI) last month, about 1.8 percentage points were accounted for by the increase in imputed rental costs of owner-occupied housing. As the majority of resident households here own their homes, they do not actually incur rental expenditure. Likewise, the sharply higher certificate of entitlement premiums for the first three months of this year affected around 8,000 new-car buyers, or a small proportion of resident households. Nonetheless, inflation is currently higher than what Singapore has seen historically, and the Government and the Monetary Authority of Singapore (MAS) remain committed to bringing it down. The MAS tightened its monetary policy stance further this month. A stronger Singapore dollar not only caps imported inflation, but also moderates the external demand for our goods and services, thereby also reducing pressures of demand in the labour market and for other domestic resources such as space. Over the medium term, this should ease domestic price pressures. The Government has also implemented various macroprudential measures to cool the property market. Although the CPI does not reflect property prices, the cooling of the property market should, over time, help to bring down other domestic costs. In the meantime, the Government has also been providing households with cash transfers that help cushion the impact of rising costs. Cindy Keng (Mrs) Director Corporate Communications Division Ministry of Trade and Industry Angelina Fernandez (Ms) Director Corporate Communications Office Monetary Authority of Singapore ****** Then a ST reader raised this: From ST Forum: http://www.straitstimes.com/STForum/Story/...ory_795118.html Alternative 'Using interest rates to cool domestic demand may be a better solution.' MR YEO CHEE KEAN: 'Stating that higher certificate of entitlement (COE) premiums only affected 8,000 new-car buyers as the Ministry of Trade and Industry and the Monetary Authority of Singapore (MAS) did in their joint reply last Saturday, ('What Govt is doing to tame domestic inflation') ignores the spillover effect that has caused used car prices to go up in tandem with COE premiums. Neither did the reply consider the multiplier effect on long-term inflation caused by higher COE prices. For example, the higher costs incurred by taxi companies replacing their fleets will result in higher taxi rental rates, which will eventually lead to higher fares. A stronger Singapore dollar will cause Singapore and Singapore companies, especially the small and medium-sized enterprises, to lose their global competitiveness. In comparison, using interest rates to cool domestic demand may be a better solution.' Edited May 9, 2012 by Vulcann Link to post Share on other sites More sharing options...
Vulcann 6th Gear May 9, 2012 Author Share May 9, 2012 So both MTI & MAS responded: From ST Forum: http://www.straitstimes.com/STForum/Story/...ory_796747.html MTI, MAS clear the air on CPI, inflation and interest rates Published on May 09, 2012 WE REFER to last Friday's letters by Ms Wendy Yuen ('The joint reply has left me more confused'), Mr Christopher Teng ('Inflation: Offer more relevant figures') and Mr Yeo Chee Kean ('Using interest rates to cool domestic demand may be a better solution'). Ms Yuen suggested that housing prices should be used to measure the cost of consuming owner-occupied housing. We understand the intuition behind this suggestion. However, the Consumer Price Index (CPI) covers only consumption expenditures. A house is both a consumption good and an investment good. As house values could appreciate or depreciate, its inclusion will introduce capital gains or losses into the CPI. To reflect only the consumption element of owner occupancy, the actual market rental is a more suitable proxy. Mr Teng suggested highlighting inflation figures that directly measure the cost experience of the majority of Singaporeans. This is indeed important. The CPI is based on a detailed survey of households' consumption patterns. The weights in the CPI reflect the consumption behaviour of a representative household. However, an individual household's consumption pattern could differ from the representative household. The sub-components of CPI thus provide more details that might relate to the experiences of particular households. For instance, year-on-year food price inflation came in at 2.7 per cent in March this year. A consumption basket comprising food, fuel and utilities, and public transport, as suggested by Mr Teng, will show an inflation rate of 4 per cent, while the overall CPI inflation rate was 5.2 per cent. Mr Yeo is right that COE prices cannot be ignored because of the spillover effects on consumer prices. Indeed, the CPI captures the effects of higher COE premiums transmitting to the prices of other goods and services, including public road transport. Mr Yeo also suggested that interest rates be used to control inflation. The exchange rate has a significant impact on the prices because the majority of products Singaporeans consume come from abroad. An exchange rate appreciation is thus an effective way to control inflation, but this has to be balanced against the adverse consequences on businesses. Interest rates play a larger role in determining asset prices compared to consumer prices. As we cannot control both the exchange rate and the interest rate given free capital flows, the Government relies on measures such as the loan-to-value ratio and stamp duties to manage asset price inflation. We will continue to place priority on addressing price pressures in the economy. Cindy Keng (Mrs) Director Corporate Communications Division Ministry of Trade and Industry (MTI) Angelina Fernandez (Ms) Director Corporate Communications Office Monetary Authority of Singapore (MAS) Link to post Share on other sites More sharing options...
Vulcann 6th Gear May 9, 2012 Author Share May 9, 2012 So who is right now on the effect of the high COE prices? Both MTI & MAS admitted it is affecting us but their boss our almighty finance guru says not leh. [confused] Link to post Share on other sites More sharing options...
Kungming 1st Gear May 9, 2012 Share May 9, 2012 So who is right now on the effect of the high COE prices? Both MTI & MAS admitted it is affecting us but their boss our almighty finance guru says not leh. [confused] Rule No 1: The boss is ALWAYS right. Rule No 2: When in doubt, refer to rule no. 1. Link to post Share on other sites More sharing options...
Vulcann 6th Gear May 9, 2012 Author Share May 9, 2012 Rule No 1: The boss is ALWAYS right. Rule No 2: When in doubt, refer to rule no. 1. Luckily they did not say the high COE prices is due to the booming economy. Link to post Share on other sites More sharing options...
Parkwalker Clutched May 9, 2012 Share May 9, 2012 Enjoy the spin! more to come if more assuring is needed. the people may not be as daft as upstairs consider.... Link to post Share on other sites More sharing options...
SimonTan 2nd Gear May 9, 2012 Share May 9, 2012 Now got more people asking better questions. So the quick reply. Link to post Share on other sites More sharing options...
Donut Supercharged May 9, 2012 Share May 9, 2012 where got necessities only increased by 3 % ??? kopi O, last time cost 70 cents, now is 80 cents or even 90 cents. do the math........ hawker food prices increased by 50 cents on average. do the math...... Link to post Share on other sites More sharing options...
Enye Hypersonic May 9, 2012 Share May 9, 2012 They have access to the real statistics. They must have known the consequences of increasing interest rates. That's why they do not want to do it. Link to post Share on other sites More sharing options...
Vulcann 6th Gear May 9, 2012 Author Share May 9, 2012 (edited) Enjoy the spin! more to come if more assuring is needed. the people may not be as daft as upstairs consider.... If the indices for both housing and transport had skewed the CPI according to them then do away with them asai boh? But we all know they are there for a reason so I hope they do not just conveniently brushed them away as a anomaly but explained convincing as it is. Edited May 9, 2012 by Vulcann Link to post Share on other sites More sharing options...
Vulcann 6th Gear May 9, 2012 Author Share May 9, 2012 where got necessities only increased by 3 % ??? kopi O, last time cost 70 cents, now is 80 cents or even 90 cents. do the math........ hawker food prices increased by 50 cents on average. do the math...... Bro during lunch we always take turns to buy a round of kopis & tehs for a group of about 5 and it cost $4-6 nowadays. And I am talking about at hawker centres or kopitiam only. Bros who work in CBDs would have to fork out much more... This is more than enough for a regular meal liao. Hang jing really pai.... Link to post Share on other sites More sharing options...
Zanter 3rd Gear May 9, 2012 Share May 9, 2012 Luckily they did not say the high COE prices is due to the booming economy. The very capable transport Minister said just that I recall? Then the finance Minister said that giving loans to purchase COE is not a factor in the rise of COE prices. His degree get from where? Two possibilities 1. They are not very smart. 2. They are smart but think we are terribly stupid? Choose your option. Link to post Share on other sites More sharing options...
Donut Supercharged May 9, 2012 Share May 9, 2012 Bro during lunch we always take turns to buy a round of kopis & tehs for a group of about 5 and it cost $4-6 nowadays. And I am talking about at hawker centres or kopitiam only. Bros who work in CBDs would have to fork out much more... This is more than enough for a regular meal liao. Hang jing really pai.... I REALLY wonder whether our ministers do actually eat and drink in hawker centres. if they do, they will not say that necessities only increased by 3%. Link to post Share on other sites More sharing options...
Vulcann 6th Gear May 9, 2012 Author Share May 9, 2012 I REALLY wonder whether our ministers do actually eat and drink in hawker centres. if they do, they will not say that necessities only increased by 3%. Frankly even if they or they families do or does, they will hardly feel the impact. A good example is the outcome of high COE prices. Is it a surprise that luxury car sales boomed instead? Just have to tighten our belts and put more effort to bring the bacon home. Link to post Share on other sites More sharing options...
Without_a_car Clutched May 9, 2012 Share May 9, 2012 my favorite wan ton mee stall raise their price by $0.50 to $3.50. Link to post Share on other sites More sharing options...
Pokyman 1st Gear May 9, 2012 Share May 9, 2012 my favorite wan ton mee stall raise their price by $0.50 to $3.50. Yep, and the ingredients and noodles remian the same wor Link to post Share on other sites More sharing options...
Evillusion Supersonic May 9, 2012 Share May 9, 2012 I REALLY wonder whether our ministers do actually eat and drink in hawker centres. if they do, they will not say that necessities only increased by 3%. they dont eat at hawker center what! they have their own prata maker and flipper that retired from a glorious job not to long ago! everyday can eat the different variety of pratas ↡ Advertisement Link to post Share on other sites More sharing options...
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