CONSUMER PRICE INDEX
Parliament of Singapore · 29 May 1989 · 7th Parliament
Official Report, 29 May 1989, Vol 54, Issue 2 · Open in the reader (summaries, search, filters)
Dr S. Vasoo asked the Minister for Trade and Industry whether the current consumer price index accurately reflects the cost of living of the working class.
The Minister for Trade and Industry (BG Lee Hsien Loong): Mr Speaker, Sir, the consumer price index is a generally accepted measure of changes in the cost of living. It is based on a representative basket of goods and services reflecting the expenditure pattern of typical Singaporean households. The Department of Statistics constantly monitors prices of the items in the basket through various means, including regular field visits to markets and popular retail outlets, and the price changes are reported monthly in the CPI.
The CPI basket is determined by a household expenditure survey of about 4,600 households, and this is conducted every five years. These households spend between $100 and $3,000 per month. Most of them, in fact, 58% of them, earn less than $1,500 a month. 61% of them live in 1-, 2- or 3-room HDB flats and 65% of the main income earners of the households are production and related workers, clerical workers or sales workers. They are therefore representative of average Singaporean households. In other words, we try to determine what the average family in Singapore buys and then we price that basket of goods every month; what does it cost; and the changes are the CPI.
Nevertheless, some people believe that the CPI underestimates the rise in the cost of living for lower income groups. This is not so. To monitor the impact of inflation on lower income groups, MTI calculates a separate price index which covers households spending less than $1,000 a month. This is the lower income group. The results show that for this group inflation is even lower than the CPI figure. Between 1983 and the first quarter of 1989, the CPI rose by 4(r)%, but for this lower income group, the cumulative rise in prices was only 2.3%.
Dr Vasoo: Sir, when will the household survey, which was last done in 1982, be updated?
BG Lee Hsien Loong: We did an update survey in 1987, and once we have all the figures digested we will update the CPI.
Dr Wang Kai Yuen (Bukit Timah): Sir, does the Minister have a separate CPI for the higher income group?
BG Lee Hsien Loong: We have not computed it but it can be done.
Source: Singapore Parliament Official Report (Hansard) for 29 May 1989. Republished on SGParliament.