The Covid-19 pandemic hit Singapore households hard last year, with the overall median household income falling for the first time since the economy’s GDP was battered by the global financial crisis more than a decade ago.

Although the Singapore government has rolled out measures to help households to maintain their standard of living, the median household income fell 2.5% last year in nominal terms from $9,425 to $9,189. After taking into account inflation, this works out to a 2.4% drop in real terms.

Singapore’s overall inflation turned positive for the first time in nearly a year owing to a smaller decline in the costs of services, as well as higher car prices and housing rents. All-items inflation came in at 0.2 percent in January on a year-on-year basis, up from 0 percent the month before.

MAS and MTI reiterated that in the quarters ahead, imported inflation is likely to pick up amid their covering global oil prices. Brent crude oil prices have risen further since the fourth quarter of last year, supported by output cuts among Opec members.

On the domestic front, cost pressures and wage growth are expected to stay low as demand in the retail and aviation sectors has not fully recovered from the recession. There are still uncertainties surrounding Covid-19 and the negative impact it has on economic growth could mitigate price pressures.