Explore how rising inflation is affecting middle-income families in Singapore, leading to financial strain and altered budgeting strategies.
Singapore, Singapore Aug 3, 2026 ALN: While inflation picked up across all household income groups in Singapore in the first half of 2026, middle-income earners like F&B business owner Jason Chua are feeling the biggest squeeze. The rising cost of living has posed some challenges for the 34-year-old and his wife. With a four-year-old son and a baby boy due in August, Chua said it has not been easy for them to manage daily household and childcare expenses.
For instance, he said, the price of a 1.6kg tin of milk powder recently climbed from $72 to $79.50. His son finishes one tin every five to six weeks, so their costs mount up quickly. This scenario is indicative of a broader trend affecting many families in Singapore, where the cost of essential goods has been on the rise, further straining household budgets.
This Singaporean dual-income couple falls in the middle 60 percent income bracket – households with per-member monthly incomes higher than the bottom 20 percent but below the top 20 percent. This segment of the population is particularly vulnerable to inflationary pressures, as they often lack the financial cushion that higher-income households possess. Data from the Department of Statistics (SingStat) on July 23 showed the overall inflation rate for middle-income households doubling to 1.8 percent, from 0.9 percent in the previous six months.
Excluding rents of owner-occupied accommodation, their overall inflation rate was 2.2 percent, also the highest among all household income brackets. Since people who own their homes do not pay rent, the consumer price index figure that excludes rentals is more representative of the average household. This situation highlights the increasing financial burden on middle-income families who are trying to balance their expenses with their earnings.
Chua, the founder of home-grown food and beverage business Beng Who Cooks, also has to juggle rising business overheads alongside his family’s expenses. The Iran war which broke out in February has disrupted supply chains, driving up his raw ingredient costs by $300 to $500 monthly. Such geopolitical events can have far-reaching consequences on local economies, affecting everything from commodity prices to consumer spending behaviors.
Petrol prices have also jumped, from around $140 to around $180 for a full tank. Transport is a hefty expense for Chua as he has to travel daily between his home in Bukit Batok and the eastern part of Singapore, where his three stalls are. This results in him having to top up his petrol once every eight days. The rising cost of fuel not only impacts individual households but also has a ripple effect on the prices of goods and services, as businesses often pass on these costs to consumers.
“The expenses have become so high that (my) income is not catching up,” he said. This sentiment is echoed by many in the middle-income bracket, who find themselves in a precarious position where their earnings are not keeping pace with the rising costs of living.
According to SingStat, the overall price increase for all households in the first half of 2026 was 1.7 percent year on year, an acceleration from the 0.9 percent pace in the second half of 2025. Excluding rents of owner-occupied accommodation, the overall price increase was 2.1 percent, up from 1.1 percent in the previous six months. These figures suggest that inflation is becoming a persistent issue, rather than a temporary spike.
SingStat said the main drivers of inflation in the first half were food, pricier cars, health insurance and petrol, largely mirroring the same cost pressures in 2025. Food prices, in particular, have been a significant concern, as they directly affect the daily lives of families. Rising health insurance costs also contribute to financial stress, especially for families with young children who may require regular medical check-ups.
These inflationary pressures were partially cushioned by lower education costs as households benefited from financial assistance schemes and lower fee caps at pre-schools, which were implemented in January 2026. This indicates that while some areas of spending are increasing, others are being managed through government intervention aimed at supporting families.
While overall inflation remains below the peak levels of late 2022, the latest figures indicate that the price pressures are building up again after a period of cooling. This cyclical nature of inflation can create uncertainty for families trying to plan their finances, as they may struggle to predict future costs.
To cushion the impact of rising cost pressures from the ongoing conflict in the Middle East, more assistance will be given to households and businesses, the Government said on July 29. The support package will cost around $900 million and comes on top of the $1 billion support package announced in April. Such government initiatives are essential in providing relief to struggling families, but they also raise questions about the long-term sustainability of such financial support.
Two-thirds of the funding – $600 million – will be used to support households. This includes $300 more in CDC vouchers for every household, as well as additional rebates in October 2026 and January 2027 to offset utility bills, Second Minister for Finance Jeffrey Siow announced on July 29. These measures aim to alleviate some of the immediate financial burdens faced by families, but the effectiveness of such support will depend on the ongoing economic conditions.
Beyond price pressures, consumers have other worries. Sumit Agarwal, professor of finance, economics and real estate at NUS Business School, noted that greater uncertainty over jobs and the economic outlook is making people more cautious. This apprehension can lead to decreased consumer spending, which in turn can impact overall economic growth.
Walter de Oude, founder and chief executive of Singapore-founded financial services platform Chocolate Finance, believed it is possible to be on a limited budget and yet not feel stressed over finances if individuals manage their cash flow well. Effective financial management becomes crucial in times of rising costs, as families must prioritize their spending and find ways to stretch their budgets.
Chua, the F&B owner, copes with his financial pressures by making Grab deliveries to supplement the income from his food business. This side hustle not only provides additional income but also reflects the adaptability of many middle-income earners who are seeking creative solutions to navigate economic challenges.
He said he is not stressed even though his budget is tight and he has to pay off $1,500 every month towards a debt from his previous failed business. This demonstrates a positive mindset that can be beneficial in managing financial stress. “I have no savings,” he said, adding that he has not been able to put aside money for two years now. The inability to save can be a significant concern for families, as it limits their financial security and ability to cope with unexpected expenses.
Nevertheless, he is contented because he makes enough to ensure his family is well provided for. This perspective highlights the importance of financial stability over mere accumulation of wealth. “I enjoy spending on my wife and son, so I do not mind putting my own wants aside,” he said. This sentiment is common among many parents who prioritize their children's needs over their own desires.
Despite earning relatively more, some families feel stressed because of the rising costs associated with their lifestyle. The financial landscape is becoming increasingly challenging for middle-income households in Singapore. As living expenses rise, families may find that their increased earnings do not translate into greater financial security, leading to a cycle of stress and anxiety.
This phenomenon is often referred to as "lifestyle inflation," where increased income leads to increased spending rather than saving or investing. For many families, the pressure to maintain a certain lifestyle can lead to financial strain, particularly in a high-cost environment like Singapore.
In conclusion, the impact of inflation on middle-income households in Singapore is multifaceted, affecting not only their financial situation but also their overall quality of life. As inflationary pressures persist, it is crucial for families to adapt their financial strategies and for policymakers to consider long-term solutions to ease the burden on these households. The economic landscape continues to evolve, and the ongoing challenges faced by middle-income earners will require careful attention and innovative approaches to ensure their financial well-being.
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