SINGAPORE (July 31): Singapore’s overall average monthly household income has risen 2.4% since half a decade ago in 2012/13, but the bottom 20% of households in the city state might be feeling even poorer than before.

The bottom one-fifth of households was the only group whose expenditure growth outpaced income growth in nominal terms.

For the bottom 20% of households, average monthly expenditure grew 3.0% per annum from 2012/13 to 2017/18, while average monthly income grew 2.8% per annum.

In comparison, the top 20% of households saw their average monthly income rise by a more modest 1.6% per annum. But their average monthly expenses actually dipped by $2 over the past five years – from $7,575 in 2012/13 to $7,573 in 2017/18.

In short: the rich are getting richer, while the poor are spending more than they earn.

Sociologist Tan Ern Ser from the National University of Singapore says the figures are a cause of concern, despite overall data from the Singapore Department of Statistics’ latest household expenditure report painting a rosy picture.

“When we look at the rising cost of living, it is not just about the overall picture but also about the specific groups,” says Tan. “You’re talking about 20% of people, that’s quite a lot of people in absolute terms.”

But while the expenditure data allows for a broad view of spending patterns, Assistant Professor Ng Kok Hoe from the Lee Kuan Yew School of Public Policy said it does not indicate whether people are meeting their needs.

"These data should also be compared with minimum income standards, or other benchmarks of what people need for a basic standard of living," Ng says.

In a press release, SingStat points out that, when comparing the performance of any particular income group over time, it is relevant to note that the comparison may not pertain to the same group of households, as not all households are consistently in the same income group over time.

It adds that differences between the growth in monthly household income and expenditure do not necessarily equate to changes in savings as households can finance their expenditure through “irregular receipts such as proceeds from the sale of properties, lump-sum CPF withdrawals, insurance claims or ad-hoc transfers that are not part of their regular income”.

According to the Report on the Household Expenditure Survey 2017/18 released on Wednesday, overall average monthly household income has risen faster than average monthly household expenditure since 2012.

Overall, Singapore resident households’ average monthly income from all sources rose 2.4% per annum in nominal terms, or 2.2% in real terms. In comparison, household expenditure on goods and services increased just 0.8% per year.

The survey found that on average, Singapore resident households were earning $11,780 per month in 2017/18, compared to $10,470 in 2012/2013. Meanwhile, average monthly expenses grew from $4,720 to $4,910.

Overall, the bulk of household expenses went to food, housing and transport needs, which accounted for 62% of monthly household expenditure.

Compared to five years ago, Singapore residents were eating out more, spending $810 a month in 2017/18, from $760 a month in 2012/13.

This was attributed to increased spending in restaurants, cafes and pubs, although hawker centres and food courts still constituted the largest share of food expenses.

Meanwhile, households are spending less on transport, averaging $780 a month in transport costs compared to $810 five years earlier.

However, 5% of their monthly expenses now go toward online shopping, compared to 1.7% previously, thanks to the growth of e-commerce.