Household Income Grows In Singapore, Income Inequality At Lowest Level

FILE PHOTO - Tourists pose for photos with the Marina Bay Sands and the Merlion statue (unseen) at a popular tourist spot along Marina Bay in Singapore July 24, 2015. (Photo: REUTERS/Edgar Su/File Photo GLOBAL BUSINESS WEEK AHEAD)

Singapore households believe that their income from their jobs increased in 2018 and the nation's income inequality remained near its lowest record for a decade.

According to official data released on Wednesday, Singaporean citizen or permanent resident headed homes with at least one working person increased their median monthly income in 2018 by 3 percent in nominal terms. It increased from $9,023 in 2017 to S$9,293.

The key Household Income Trends reported by the Singapore Department of Statistics showed that taking inflation as a factor, household income increased by 2.6 percent in real terms. Monthly household income's median monthly increased by 3.4 percent in nominal terms reaching S$2,792 in 2018.

The report showed that the households across all income levels gained real growth in terms of average work earnings per member last year. The increase in growth of households in the 1st to 70th percentile income groups increased from 2.5 percent to 3.4 percent while those under the 71st to 90th percentile income groups gained real growth of 4 percent. Real growth of 2.3 percent was recorded for those households at the top 10 percent.

Singapore's Gini coefficient in 2018 was measured at0.458. The coefficient measures income inequality as a ratio from 0 to 1. The record remained at the lowest levels in a decade as the nation's record falls at 0.459 in 2017 and 0.458 in 2016. Its coefficient of the nation dropped to 0.404 after government transfers and taxes were included. The report also showed that families in one-room and two-room HDB flats have an average household income of S$10,347 per household. It is more than twice the average income of those who are on a different level.

The report also reflected that the resident household which includes those with no working person on the household receives an average of S$4,494 per household member from various Government schemes in 2018.

Analysts, however, told The Business Times, that household income growth could turn sluggish due to a broader slowdown this year despite what Maybank Kim Eng senior economist Chua Hak Bin calls a "respectable increase" in growth.

Singapore Management University assistant professor of finance Aurobindo Ghosh said that he is optimistic about prospects for 2019. He highlighted that households might need to earn approximately 4 percent more in dollar terms to achieve the same level of real improvements since inflation is expected to pick up this 2019. Chua, however, said that income growth could still continue to ease on an economic downturn despite inflationary pressures recede.

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