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AI adoption could push up costs of living in Singapore
One reason: People may have to pay higher prices for things they want, because those earning more will be able to.
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The year 2026 could mark a new phase, where AI may push up future living costs, despite driving present day innovation, says the writer.
ST PHOTO: KUA CHEE SIONG
Zach Lee
The story of 2025 has been the demand for artificial intelligence (AI) propelling growth against the headwinds of a raging trade war and a world of higher tariffs. Prime Minister Lawrence Wong outlined how Singapore was buoyed by demand in electronics and semiconductors in his New Year message. There is also the expectation that AI will be a force multiplier for productivity.
What is less appreciated is that the same AI-driven growth can intensify cost pressures for businesses and households. And while commentaries on AI stress that long-term productivity gains are deflationary, the shift could produce localised cost of living pains, at least in the short term. The year 2026 could mark a new phase, where AI may push up future living costs, despite driving present-day innovation.
