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DBS senior economist Irvin Seah believes that the GST increase will be implemented in July and the Government will raise the tax by 2 percentage points in one go.
A one-step jump will limit the long-term impact of the increase, and the effect on overall inflation should fade away in 12 months, said Mr Seah.
While Ms Ling also thinks that the higher GST could kick in as early as July, she believes that a more gradual approach, in the form of a staggered increase, would not result in knee-jerk reactions from consumers.
Ms Ling estimates overall inflation this year to be around 2 to 3 per cent. Wage growth would have to be above that to offset the effects of the GST increase, she noted.
Mr Seah said that the labour market is showing signs of improvement, particularly for the finance, info-communication and technology industries.
Wages in these sectors would likely rise, though such growth would not likely occur across the economy.
“For the labour market to improve and wage growth to rise, we need the economy to be on a firmer footing. That will really depend on how soon we are able to reopen the economy,” said Mr Seah.
https://shrtcô.de/z789Tv
A one-step jump will limit the long-term impact of the increase, and the effect on overall inflation should fade away in 12 months, said Mr Seah.
While Ms Ling also thinks that the higher GST could kick in as early as July, she believes that a more gradual approach, in the form of a staggered increase, would not result in knee-jerk reactions from consumers.
Ms Ling estimates overall inflation this year to be around 2 to 3 per cent. Wage growth would have to be above that to offset the effects of the GST increase, she noted.
Mr Seah said that the labour market is showing signs of improvement, particularly for the finance, info-communication and technology industries.
Wages in these sectors would likely rise, though such growth would not likely occur across the economy.
“For the labour market to improve and wage growth to rise, we need the economy to be on a firmer footing. That will really depend on how soon we are able to reopen the economy,” said Mr Seah.
https://shrtcô.de/z789Tv
