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MAS: Core inflation to persist around 5%; 1% increase in GST next year should have transitory effect on inflation

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The Monetary Authority of Singapore (MAS) has said that core inflation is likely to stay around 5% for the rest of 2022, and into early 2023. Although the one percentage point increase in the Good & Service Tax (GST) will result in a one-off step-up in the price level, its effect on inflation should be transitory.

This was said with MAS’ latest monetary statement where it announced the fifth tightening of its monetary policy this year.

MAS expects that the global economy to face high inflation and lower growth next year. At the same time, MAS Core Inflation is expected to remain elevated over the next few quarters, with risks still tilted to the upside.

MAS has assessed that, on balance, a further tightening of monetary policy is needed to help ensure that price pressures are dampened over the next few quarters. Therefore, it will re-centre the mid-point of the S$NEER policy band up to its prevailing level. There will be no change to the slope and width of the band.

This policy shift by MAS, building on past tightening moves, will further reduce imported inflation by strengthening the Singapore dollar and help curb domestic cost pressures. The policy stance will help dampen inflation in the near term and ensure medium-term price stability, providing the basis for sustainable economic growth.

According to the data released by the Ministry of Trade and Industry, it is shown that global economic activity slowed in Q3 2022. Persistently high inflation and tighter financial conditions have begun to dampen private consumption and investment. The downturn in the global electronics industry has also weighed on a number of external-oriented Asian economies. Meanwhile, the pace of recovery has been muted in regional economies that have not fully re-opened.

MAS forecasts a slower pace of growth for the Singapore economy in tandem with weakening global demand. However, core inflation will stay elevated over the next few quarters, as imported inflation remains significant and a tight labour market supports strong wage increases.

MAS Core Inflation, which excludes the costs of accommodation and private transport, rose by more than expected in July–August, to 4.9% year-on-year, from 3.8% in Q2. Inflation for discretionary goods and services was the major contributor, amid robust demand conditions that supported the pass-through of higher imported and domestic costs.

Electricity & gas and non-cooked food inflation also rose, reflecting the effects of the step-up in global energy and agricultural input costs compared to a year ago. At the same time, private transport and accommodation inflation accelerated, causing CPI-All Items inflation to pick up to 7.3% July–August, from 5.9% in Q2.

For the rest of 2022, the confluence of demand and supply factors that drove the price increases in July–August is expected to persist. A tight domestic labour market will support robust wage increases, while imported inflation will remain significant across a range of intermediate and final goods.

In the coming year, costs pressures which have been accumulating along domestic and global supply chains will continue to pass through to consumer prices. Even as prices of energy and food commodities have moderated from their peaks, businesses will face higher utility and raw material costs as contracts are renewed. The pace of domestic unit labour cost increases should ease over the course of 2023, as labour demand and supply rebalance, but remain above its historical average.

MAS said that it will continue to closely monitor global and domestic economic developments, amid heightened uncertainty on both the inflation and growth fronts.

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Singapore

PM Wong’s budget flight homecoming via Scoot makes headlines, but why?

Prime Minister Lawrence Wong took an economy-class Scoot flight back to Singapore from Laos after attending ASEAN summits. His surprise at being greeted with cheers by fellow passengers—mostly seniors on a holiday tour—was captured on video.

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Prime Minister Lawrence Wong’s recent journey home from the ASEAN summits in Laos was marked by an unusual moment of attention—not for his political achievements, but for the fact that he flew home on a budget Scoot flight.

While the sight of a head of government flying economy might seem like a refreshing break from the norm, one can’t help but wonder if this episode is more spectacle than substance.

As Mr Wong boarded the flight, the passengers—primarily senior Singaporeans returning from a holiday tour—offered him enthusiastic cheers and applause.

The Prime Minister, visibly surprised, stopped to acknowledge them with a smile and a wave, as shown in a video shared by Channel NewsAsia correspondent Leong Wai Kit on X.

But while the scene might have appeared heartwarming, it also raised questions about how such moments are framed in the public eye.

It’s worth asking: why the focus on a Prime Minister taking a budget flight? Is it truly about his connection with everyday Singaporeans, or is it just a convenient way to signal relatability? Scoot, after all, doesn’t offer business class.

The only choice is economy—so there’s little to romanticise about his seat selection. Unlike on premium airlines, there was no “business class” to forego.

Mr Wong later took to Facebook to express his appreciation for the warm reception, calling it a moment that “felt like home.”

His post included a video of the passengers, who turned out to be a group of cheerful Singaporean seniors.

While his interaction with the public was genuine, the eagerness to amplify such moments raises concerns about whether these instances are being used to craft an image of the Prime Minister as approachable and down-to-earth, without addressing more substantive issues.

Wong had just returned from the 44th and 45th ASEAN Summits, his first in his capacity as Prime Minister. He also conducted official visits in Laos, meeting with Prime Minister Sonexay Siphandone and President Thongloun Sisoulith.

These meetings, involving serious regional discussions on diplomacy, trade, and economic cooperation, arguably deserved more focus than his flight home. Yet, it’s the budget flight that captured the public’s attention—something that highlights the power of optics in shaping political narratives.

The choice to publicise Wong’s flight on a budget airline suggests a carefully curated image: the idea that even Singapore’s Prime Minister travels like the average citizen.

But this carefully framed relatability does little to address the larger challenges that the country faces, from rising costs of living to economic concerns.

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Opinion

Lee Wei Ling and Lee Hsien Yang’s fight to fulfil LKY’s final wish

Why were Dr Lee Wei Ling and Lee Hsien Yang so adamant about demolishing the Oxley Road home, despite personal sacrifices? It likely became a moral duty to honour what they saw as their father’s core values. After Lee Kuan Yew’s wish for a quick death wasn’t fulfilled in 2015, they may have felt a stronger responsibility to ensure his second wish was respected.

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Dr Lee Wei Ling, who passed away on 9 October 2024, was a steadfast advocate for her father, Lee Kuan Yew’s (LKY)—Singapore’s founding Prime Minister—wish to demolish their family home at 38 Oxley Road.

Her funeral on 12 October 2024 was not just a moment of farewell but a poignant reminder of her lifelong commitment to honouring her parents’ final wishes, particularly the demolition of the Oxley Road house.

Even at her passing, Dr Lee never wavered in her dedication to fulfilling her father’s last wish—a cause she championed until her final days, despite battling progressive supranuclear palsy.

In his eulogy for his beloved sister, Lee Hsien Yang (LHY) conveyed a message from Dr Lee, in which she reaffirmed their parents’ wish for their home at 38 Oxley Road to be demolished after their deaths:

“My father, LEE KUAN YEW, and my mother, KWA GEOK CHOO, had an unwavering and deeply felt wish for their house at 38 Oxley Road, Singapore 238629, to be demolished upon the last parent’s death. LEE KUAN YEW directed each of his three children to ensure that their parents’ wish for demolition be fulfilled. He also appealed directly to the people of Singapore: Please honour my father by honouring his wish for his home to be demolished.”

The house, which had become a focal point of public and familial dispute, remained central to her legacy.

But why were Dr Lee and LHY so adamant about fulfilling their father’s wish, despite the personal sacrifices they faced?

Some netizens speculated that LHY, who acquired the property from their brother, Lee Hsien Loong (LHL), then-Prime Minister in 2015, might intend to sell it for financial gain—an allegation put forth by LHL in his statutory declaration.

However, given the persecution Dr Lee, LHY, and his family have endured—ranging from surveillance to political attacks—it is clear that financial benefit would hardly justify the immense personal and legal challenges they have faced over the years.

Their determination, therefore, seems rooted not in monetary interests but in a deep sense of duty to their father, LKY, and his values.

It could be argued that the siblings saw the demolition of the house as more than a matter of inheritance—it was a moral imperative, driven by filial piety and a desire to protect their father’s legacy from being politicised.

In their public statement on 14 June 2017, accusing LHL of abusing his power as Prime Minister, they articulated their commitment: “We have nothing to gain from the demolition of 38 Oxley Road, other than the knowledge that we have honoured our father’s last wish.”

Their determination to demolish the Oxley Road home may also have been rooted in a sense of guilt over failing to honour another of their father’s critical wishes: his desire for a quick death without being placed on life support.

Placed on Life Support for Weeks Despite Advance Medical Directive

LKY, known for his pragmatism, was clear that he did not wish to be kept alive artificially if there was no chance of recovery.

In his 2013 book One Man’s View of the World, he revealed that he had signed an Advance Medical Directive (AMD) stating that if he reached a point where he could not recover and would need to be kept alive by artificial means, he wished for the doctors to let him “make a quick exit.”

In his own words: “Some time back, I had an Advance Medical Directive (AMD) done which says that if I have to be fed by a tube, and it is unlikely that I would ever be able to recover and walk about, my doctors are to remove the tube and allow me to make a quick exit.”

He made it clear in his personal writings that he preferred a dignified end rather than prolonged suffering or incapacitation—likely a reflection of having cared for his wife, Kwa Geok Choo, who had been bedridden for over two years as a result of a series of strokes.

His desire for a swift and natural death was one of only two explicit wishes he made for his final days, the other being the demolition of his home after his passing.

Yet, when LKY’s health deteriorated in early 2015 due to severe pneumonia, this wish was not honoured.

According to the official statement from the Prime Minister’s Office, LKY was placed on mechanical ventilation in the Intensive Care Unit as his condition worsened in February of that year. This meant he remained on life support for weeks until his death on 23 March 2015.

The AMD was previously highlighted by Dr Lee in a Facebook post in April 2019, where she noted that Lee & Lee—the law firm co-founded by her parents—had handled her father’s personal matters, including his wills, powers of attorney, and AMD, which LKY reaffirmed in August 2014.

In that post, Dr Lee also accused LKY’s lawyer, Mdm Kwa Kim Li (KKL), of lying about her involvement in the events that led to LKY’s final will—a point crucial to the persecution her younger brother and sister-in-law are currently facing.

Dr Lee asserted that Mdm Kwa had been in discussions and exchanged emails about what LKY wanted in his December 2013 will, despite KKL’s denial.

In May 2023, a Disciplinary Tribunal (DT) found KKL guilty of misconduct, confirming Dr Lee’s assertions that KKL had misrepresented her role in LKY’s final will.

It was proven that KKL had misled the executors of LKY’s estate—Dr Lee and LHY—by withholding critical information regarding instructions she had received from LKY about his will.

Despite her claims to the contrary, evidence showed she had been in correspondence with LKY about potential changes in November and December 2013. The tribunal ruled that her conduct fell short of the standards expected of a solicitor and imposed penalties, including a fine of S$8,000 and additional costs to the Law Society of Singapore.

It remains unclear who made the decision to place LKY on life support despite his AMD or whether the AMD, overseen by KKL’s law firm, had been highlighted to the attending doctors. This will likely remain a mystery—just as it is unknown who misled LKY into believing that his house had been gazetted by the Singapore government.

Note by Kwa Kim Li that she couldn’t find the records of 38 Oxley Road being gazetted and that she had informed Lee Kuan Yew of this.

Regardless, this failure to honour LKY’s wish, along with the likely prolonged suffering he endured while on life support, may have placed an emotional burden on Dr Lee and LHY, knowing that they had been unable to fulfil their father’s desire for a quick and dignified end.

This experience likely intensified their resolve to ensure that his other major wish—the demolition of 38 Oxley Road—was honoured. For them, it went beyond fulfilling a practical request; it became a personal mission to ensure that at least one of their father’s final wishes was carried out.

This was made clear in their 2017 statement, where they expressed profound disappointment in LHL, whom they accused of blocking the demolition for political reasons—allegations that LHL categorically denied both in public and in parliament. They wrote, “Hsien Loong has everything to gain from preserving 38 Oxley Road—he need only ignore his father’s will and values.”

LKY feared that the house might become a symbol of his personal legacy, detracting from his contributions to Singapore as a whole. He always prioritised the collective good over personal glorification, viewing the house as a private space rather than something to be preserved for political or historical purposes.

Dr Lee emphasised this about her father’s personal beliefs in a 2016 Facebook post, stating, “Papa was dead set against a personality cult and any hint of cronyism.”

The siblings believed that by preserving the house, their brother was not only defying their father’s will but also eroding the values LKY stood for: humility, simplicity, and putting the country first.

Dr Lee went so far as to refer to LHL as a “dishonourable son” for trying to build a “Lee family cult.”

In response to the allegations, LHL stated in his 2017 Ministerial Statement that he had recused himself from all decisions regarding 38 Oxley Road and that a ministerial committee, led by Deputy Prime Minister Teo Chee Hean, had been studying various intermediate options related to the house.

In the same parliamentary session, DPM Teo stated that the government’s position was that “no decision is needed now” as Dr Lee was still living in the property—implying that a decision would be made after her passing. With Dr Lee’s recent passing, this deferred decision on the fate of the house will likely be addressed soon.

LHY and LWL’s Sacrifices to Fulfil Their Father’s Final Wish

LHY, who had expressed his sadness over his sister’s death and their shared commitment to their father’s wishes, has frequently highlighted the personal cost of their battle.

In March 2023, he spoke of feeling “deeply saddened” that he had become a “refugee” from his own country due to his refusal to back down on the Oxley Road issue. Both he and Dr Lee had faced what they described as harassment and surveillance in the years following their public dispute with their brother.

Their 2017 statement had already indicated their discomfort with the political environment in Singapore, where they felt “closely monitored in [their] own country” and could no longer trust their brother “as a brother or as a leader.”

Currently, LHY and his wife, Lee Suet Fern (LSF), who are living outside Singapore, face allegations of perjury by Singaporean authorities, accused of misrepresenting the circumstances surrounding LKY’s Last Will (dated 17 December 2013) during LSF’s Disciplinary Tribunal hearing for alleged misconduct.

It was alleged that they rushed the signing of the will for personal gain and misled LKY, particularly regarding the Demolition Clause, as described by DPM Teo in a 2023 parliamentary response, where he first revealed that the police had commenced investigations into LSF and LHY for potential offences of giving false evidence in judicial proceedings.

However, the findings from the DT in May 2023, which confirmed that LKY’s lawyer, KKL, had misrepresented her role, show that LKY had directly communicated his intentions about the will’s changes. This undercuts the allegations that LHY and LSF had deceived LKY, as his wishes—including those of 38 Oxley Road—were clear and known to KKL.

LHY, due to the perceived risk from Singaporean authorities, is unable to return to Singapore for Dr Lee’s funeral, much like how LSF had to be absent from her own father’s funeral in July of last year.

By staying abroad, LHY may feel he can better pursue LKY’s final wish—the demolition of the house—especially after Dr Lee’s passing, rather than risking being ‘trapped in the system.’

In many ways, the conflict over 38 Oxley Road represented more than just a family dispute—it was a struggle over the legacy of one of Singapore’s most iconic leaders.

Dr Lee and LHY believed that allowing the house to stand would betray their father’s values and final wishes, as they stated in their public posts. Their determination, however, may have been further fuelled by the emotional weight of having been unable to fulfil one of his other requests—the wish for a quick, dignified death.

Thus, the demolition of the house became not just an act of obedience but a personal mission to ensure that at least one of LKY’s final wishes was honoured.

As Dr Lee is laid to rest, the fate of 38 Oxley Road remains unresolved, especially with the 2021 amendments to the Preservation of Monuments Act, which allow the National Heritage Board to issue an Enforcement Notice (EN) to halt any activity that risks destroying, damaging, or altering a National Monument.

But what is undeniable is that she devoted her life to fulfilling her duty as a daughter, standing firm in her resolve to honour her parents’ wishes—even when it came at great personal and familial cost.

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