Singapore is ready to provide more support in dealing with the rising living costs as inflation and interest rates remain high, according to Prime Minister Lee Hsien Loong.

"The world is unlikely to return anytime soon to the low inflation levels and interest rates that we have enjoyed in recent decades," Lee said on the eve of the country's National Day in a televised message. "I know that the cost of living is on everyone's mind."’

Rising living costs have long been a source of contention in the wealthy city-state ruled by Lee's political party since its independence in 1965. Households are now feeling the pinch of rising costs, largely as a result of the conflict in Ukraine.

According to a DBS Bank analysis, Singaporeans are spending more relative to their income, with the expenses-to-income ratio rising to 64% in May from 59% the previous year.

Lee stated that the government has implemented a number of assistance programmes, focusing on those in greatest need. More measures of this nature will be "rolled out in the coming months," he added.

To ensure that local wages keep pace with inflation, Singapore will need to take a "deeper response" by transforming industries and increasing productivity, according to Lee.

The country's key core inflation gauge rose to its highest level in nearly 14 years in June, as the economy slowed in the second quarter due to rising prices.

Credit: Bloomberg