Singapore Inflation Accelerates to 2-Year High

Singapore’s inflation rate last month rose to the highest level since December 2008, adding pressure on the central bank to damp price gains by allowing greater currency appreciation.
The consumer price index increased 4.6 percent in December from a year earlier, after climbing 3.8 percent in November, the Department of Statistics said in a statement today. The median estimate of 13 economists surveyed by Bloomberg News was for a 4.5 percent gain. Prices rose 0.2 percent from November, without adjusting for seasonal factors.
Singapore’s rebound last year from a 2009 global recession has fueled inflation, prompting the island to tighten monetary policy through faster currency gains and take steps to cool the property market. Private home prices rose to a record in 2010, while the cost of car-ownership permits surged as the economy expanded an unprecedented 14.7 percent.
“Higher-than-normal inflation is here to stay for much of this year,” Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore, said before the report. Inflation may “stay above the 4 percent level in the next few months. Oil prices and wage inflation will start to feature more prominently in the consumer price index.”
The Monetary Authority of Singapore uses the exchange rate instead of interest rates to manage inflation, which it forecasts will average between 2 percent and 3 percent this year. Inflation was 2.8 percent in 2010, today’s report showed. Trading Band
The city state’s inflation rate may reach as much as 5 percent in the coming months, central bank Deputy Managing Director Ong Chong Tee said last week. The Singapore dollar’s appreciation is helping limit imported inflation and the currency’s trading band is providing flexibility to cope with capital inflows, Ong said Jan. 17.
The Singapore dollar has gained more than 9 percent against the U.S. currency in the past year. The central bank said in October it will steepen and widen the currency’s trading band while continuing to seek a “modest and gradual appreciation.” Its next monetary policy review is in April.
There is more than a 50 percent chance that Singapore’s central bank will tighten further in April, Yougesh Khatri, a senior economist at Nomura Holdings Inc. in Singapore, said at a press briefing today. .
by Shamim Adam
Source: Bloomberg
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Posted by Online Press on January 25, 2011.
Categories: Government, Snippets
One Response
Inflation keeps on getting higher and higher because PAP keeps on saying we needs immigrants. To think that LKY says we needs more young immigrants! WHY DO WE NEED SO MANY IMMIGRANTS? This policy of letting foreigners flood our island has not increase our birth rate but has seen our birth rates going lower. It has also seen our MRT jammed even during off peak periods. The biggest problem with letting so many immigrants are that Singapore’s standard of living have gone up making it harder for young couples to have children and for them to buy HDB flats. SO OBVIOUSLY THIS POLICY OF LETTING FOREIGNERS FLOOD OUR ISLAND IS NOT WORKING SO WHY ARE PAP STILL INSISTING ON THIS POLICY? Is this PAP running out of ideas? Didn’t PAP says that they anticipates problems? IT IS NOW LOOKING LIKE THEY ARE REACTING TO PROBLEMS. The solution to this mess: VOTE PAP OUT! ENOUGH HAVE BEEN SAID ABOUT THIS!!! Theo

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