In economics, demand that is more than supply, prices will go up
or supply that cannot keep up with demand, prices will go up.
In Singapore, almost everything is imported. So, if the imported
prices increase, the prices in Singapore will go up. The only way
to reduce prices in Singapore is to buy from the chepeast source of
imports or to buy inferior imports or substitute imports to as to
reduce the prices in Singapore.
Another way, it is to make Singapore dollar stronger so that
singapore can still buy the same amount or slightly amount of the
higher price imports. Singapore dollars can only become stronger if
there are greater demand for Singapore dollars (eg attract more
tourists to spend in Singapore or exports more) or less supply of
Singapore (eg imports less or fewer Singaporeans go for overseas
trips to spend).
Alternatively, the government can subsidize the imports but this
will require a lot of money and it will be difficult for the
government to sustain on a long-term basis when the imports prices
keep rising.
Also, the consumers can choose to buy less imports and use more
local goods and services but this might not be possible as
Singapore imports almost everything and some goods cannot be
substituted.
Theoretically, the above analysis is correct. But, it is
incorrect for anyone who does not have the money to keep up with
the sharply increase in prices !!!.
