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Singapore's
inflation holds near highest since 1982
Shamim
Adam
Bloomberg
24 Mar
08
http://www.bloomberg.com/apps/news?pid=20601080&sid...
Singapore's
inflation in February held near the highest since 1982, signaling
the central bank may allow the currency to strengthen to contain
price pressures.
The consumer price index jumped 6.5
percent from a year earlier, after gaining 6.6 percent in
January, the Department of Statistics said today. Economists had
estimated a 6.8 percent increase. Prices rose 0.5 percent from
January.
The Singapore dollar this month rose to an
all-time high versus the U.S. currency, helping reduce import
costs even as food and energy prices rose. The Monetary Authority
of Singapore, which expects inflation this year to gain at more
than double 2007's pace, will release its twice-yearly review of
the currency next month.
"It makes sense for the
central bank to keep its stance of allowing the currency to
appreciate as it will help the economy cope with imported
inflation,'' said Alvin Liew, an economist at Standard Chartered
Bank in Singapore. "Still, there are also domestic sources
of inflation and other measures may be needed to bring that
down.''
The Singapore dollar has gained 3.4 percent this
year. The central bank, which has sought a "gradual and
modest'' strengthening in the currency since April 2004, said in
October it would allow a "slightly'' faster appreciation in
the Singapore dollar.
The island's currency fell 0.3
percent to S$1.3903 against the U.S. dollar as of 1:15 p.m. in
Singapore.
"Remained stable"
Singapore's central bank expects inflation to average
between 4.5 percent and 5.5 percent in 2008, after gaining 2.1
percent last year.
"The underlying momentum in
inflation remained stable,'' the government said in a statement
today.
Food prices, which make up 23 percent of the
index, rose 6.7 percent in February from a year ago, following
January's 5.8 percent increase. From January, food prices gained
1.3 percent.
Rising prices of daily food essentials have
prompted the government to roll out a campaign which included
newspaper and television advertisements to encourage consumers to
switch to cheaper frozen meats from fresh ones.
Transport
and communication costs, the second-biggest component at 22
percent of the consumer price index, climbed 7.6 percent in
February from a year earlier. From January, transport and
communication prices fell 0.1 percent.
Oil prices
breached $110 a barrel this month, increasing fuel and transport
costs for consumers. The Singapore government doesn't subsidize
pump prices, leading petrol companies to pass on the rising
gasoline and diesel costs to car owners.
Housing costs,
the third-largest component of the price index, climbed 8.8
percent from a year ago. The increase came as the government
raised property valuations for public housing at the beginning of
the year. From a month ago, housing prices rose 0.5 percent.
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