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Inflation to rise up to 3.5%
Apr 14, 2010
THE Government expects Singapore's inflation to rise between 2.5 and 3.5 per cent this year, slightly higher than the earlier 2 to 3 per cent forecast.
The Ministry of Trade and Industry on announced the revised projection for inflation on Wednesday, in view of the strong economic recovery in the first quarter, prompting it to raise growth forecast for this year from from 4.5 to 6.5 per cent to 7 to 9 per cent.
At the same time, the Monetary Authority of Singapore (MAS) also tightened its monetary policy on Wednesday by recentreing its Singapore dollar policy band upwards and by shifting its policy to modest and gradual appreciation for the currency.
The MAS said inflation averaged 0.6 per cent in the first two months, rising from -0.3 per cent and -0.8 per cent in the last two quarters of 2009 respectively. On a sequential basis, consumer price inflation has trended higher since the third quarter of last year, largely due to the rise in global commodity prices and private road transport costs.
"These two factors will continue to drive headline inflation rates up for the rest of 2010," said MAS in a statement. Meanwhile, other domestic sources of inflationary pressures, though subdued presently, could be expected to emerge in the coming quarters.
MAS added that the labour market has tightened, with the seasonally adjusted resident unemployment rate falling from 5 per cent in September last year to around its pre-crisis rate in December. "Wage growth will begin to pick up this year, while commercial rentals are also likely to rise given improved economic conditions. Overall CPI inflation in 2010 is projected to be between 2.5 and 3.5 per cent, slightly higher than the 2 to 3 per cent," it said.
Apr 14, 2010
THE Government expects Singapore's inflation to rise between 2.5 and 3.5 per cent this year, slightly higher than the earlier 2 to 3 per cent forecast.
The Ministry of Trade and Industry on announced the revised projection for inflation on Wednesday, in view of the strong economic recovery in the first quarter, prompting it to raise growth forecast for this year from from 4.5 to 6.5 per cent to 7 to 9 per cent.
At the same time, the Monetary Authority of Singapore (MAS) also tightened its monetary policy on Wednesday by recentreing its Singapore dollar policy band upwards and by shifting its policy to modest and gradual appreciation for the currency.
The MAS said inflation averaged 0.6 per cent in the first two months, rising from -0.3 per cent and -0.8 per cent in the last two quarters of 2009 respectively. On a sequential basis, consumer price inflation has trended higher since the third quarter of last year, largely due to the rise in global commodity prices and private road transport costs.
"These two factors will continue to drive headline inflation rates up for the rest of 2010," said MAS in a statement. Meanwhile, other domestic sources of inflationary pressures, though subdued presently, could be expected to emerge in the coming quarters.
MAS added that the labour market has tightened, with the seasonally adjusted resident unemployment rate falling from 5 per cent in September last year to around its pre-crisis rate in December. "Wage growth will begin to pick up this year, while commercial rentals are also likely to rise given improved economic conditions. Overall CPI inflation in 2010 is projected to be between 2.5 and 3.5 per cent, slightly higher than the 2 to 3 per cent," it said.
