Assoc Prof Jamus Jerome Lim (Sengkang): Just a quick follow-up on the question about inflation expectations. I wonder if the Minister of State can elaborate on whether MAS has observed any evidence of inflation pressures actually passing through to wages, in particular? And if so, what kind of mitigation mechanisms does the MAS have in terms of dealing with the possibility that this could become more entrenched?
Mr Alvin Tan: I think the Member for his supplementary question. As MAS has also communicated, MAS Core Inflation is expected to ease more discernably over the second half of 2023. This reflects a combination of base effects and also moderating external and domestic labour cost pressures. What does this entail? It actually suggests that longer-term inflation expectations are unlikely to persistently increase. Of course, we are looking at this and monitoring this very closely.
But more broadly, wages in Singapore are not tightly indexed to inflation. Over the years, our tripartite wage-setting institutions have ensured that wage outcomes remain in line with productivity growth. For these reasons, we assess that the risk of a wage price spiral remains contained at this point. But we will closely monitor developments as they go.
Ministry of Trade and Industry
20 March 2023