SINGAPORE: With Chinese New Year just around the corner, firms in the food and services sectors are heading into crunch time during what is expected to be a peak revenue period for many.

However, consumers are feeling the pinch from inflation and the recent Goods and Services Tax (GST) hike, leading to more muted spending compared to previous years, said businesses.

"Right now, the GST just went up, so people are sensitive to the increase in price. Over time the effect will die off," said Professor Sharon Ng, head of the marketing faculty at Nanyang Business School.

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It's high time Singaporeans cap the GST rate at 9% permanently after Jan 1, 2024 to stop feeling the pinch.