Minister Shanmugam and professor Leong are wrong in their GST hike analysis. - Part 2.

https://sg-stock.blogspot.com/2025/03/minister-shanmugam-and-professor-leong.html

This is a follow-up on our earlier post above.

Did the 2 previous GST hikes turbocharge SG inflation when GST increased from 7% to 9%?

When our GST increased from 7% to 8%, the nominal increase was 1% but the absolute increase was about 14.3% (1/7).

Let's assume that our business owners were not profiteering from the 2 GST hikes and only upped their prices by around 15% each.  Notwithstanding the inflation cost, the previous 2 GST hikes had boosted the business cost by 32.25% ([1.15%^2]-1).

Therefore, a cup of coffee would need to increase from $1.20 to $1.60 (1.20 x 1.3225) just to defray the 2 GST hikes.  If we were to include the inflation cost, it would not be a surprise to buy a cup of coffee at $1.80 at a coffee shop.