Middle income gain less

Middle-income households have not benefited as much from negative inflation this year compared with those in the highest and lowest income brackets.

Data out yesterday showed that those in the middle 60 per cent income group experienced negative inflation of 0.2 per cent over the past six months.

The lowest income quintile had negative inflation of 0.7 per cent; it was negative 0.6 per cent for the top 20 per cent income group.

For all income groups, these declines were largely driven by cheaper accommodation and a dip in electricity tariffs due to oil price falls.

However, poorer households saw a larger decline in outpatient medical treatment fees, while richer ones enjoyed lower car prices.

These price dips were partially offset by moderate increases in food prices for all income groups.

Excluding imputed rentals - a gauge of how much a household would spend on rent if its occupants did not own the house they live in - the consumer price index for the lowest 20 income quintile declined by 0.1 per cent, while that for the middle 60 per cent income group went up by 0.4 per cent.

DBS economist Irvin Seah said the "sandwiched class" is not benefiting as much from declines in prices of big-ticket items such as cars.

This article was first published on July 24, 2015.
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