AI adoption could push up costs of living in Singapore

In this commentary, Zach Lee, PhD candidate in Economics at the SSS, NTU said while there is 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. Analysts’ comments that AI helps with long-term productivity gains are deflationary, he said. The shift could produce localised cost of living pains, at least in the short term, and the year 2026 could mark a new phase, where AI may push up future living costs, despite driving present-day innovation.

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