SINGAPORE : The Singapore Government is keeping a close tab on business costs as rising costs could hurt Singapore's competitiveness. Speaking in Parliament on Monday, Minister for Trade and Industry Lim Hng Kiang said that while consumer prices still remain low, inflation is expected to pick up in the second half of the year.
In recent months, businesses have expressed concern over rising property prices, rentals and wages.
And the government is reiterating once again that it is keeping a close eye on the impact on business costs.
Mr Lim said: "In recent quarters - we've seen increases in property prices and rentals, and wages. We have to maintain vigilance over our costs, as excessive cost increases will dampen our growth prospects. We have taken a proactive approach so far. To address space constraints, we have introduced interim office space supply, and HDB flats for rental."
The Ministry of National Development and the Urban Redevelopment Authority have also started to release additional information on property prices and rents to help the public make informed decisions.
Mr Lim said his ministry has released ample supply of land into the market with more than 42,000 residential units, and 630,000 square metres of office space to be completed by 2010.
Speaking in Parliament, he also noted that inflation has remained low although it is expected to pick up.
Mr Lim said: "We do expect inflation for the second half of this year to go up, partly reflecting the global inflationary trends. Then of course we have the one-off impact of the GST. But our experience shows that when we had similar increases in GST, this is a short term impact.
"And over time, the impact on costs will be mitigated. Overall we still look at an inflation of between 1 and 2 percent this year, which is a little higher than our previous years, but still very reasonable, considering that this is already more than 16 quarters of growth."
Singapore's consumer prices rose by a higher-than-expected 1.5 percent in July from the previous month mainly due to the hike in GST and surging property prices. - CNA/ch
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