SGHOUSING.COM 新加坡房地产网

Singapore’s annual inflation rate was 6.5 per cent in July, easing from record highs in the previous three months, official data showed Monday.

The July rate fell from 7.5 per cent, a 26-year peak recorded in April, May and June.

The Department of Statistics (DOS) said July’s consumer price index (CPI) increased primarily because of higher costs for housing, food, and transport and communication.

On a seasonally adjusted basis the July CPI was 0.4 per cent higher than in June, DOS said.

Singapore’s de facto central bank late last month raised its inflation forecast for 2008 to 6.0-7.0 per cent from 5.0-6.0 per cent.

The Monetary Authority of Singapore (MAS) said external developments, including higher prices for oil and food, and inflation in the country’s trading partners, had affected Singapore because of its open economy and heavy dependence on imports.

DOS said housing costs in July advanced by 12.5 per cent year-on-year as a result of higher accommodation prices and electricity tariffs.

Food prices increased 8.5 per cent from a year ago, mainly driven by higher costs of food imports from Malaysia, which supplies almost two thirds of Singapore’s food supplies. Malaysia hiked its fuel prices by as much as 40 per cent in June, fuelling the spike in food prices.

Costs of transport and communication rose by 3.4 per cent due to an increase in petrol prices and taxi fares.

On a half-year basis, households in Singapore experienced an average 7.1 per cent increase in prices in the first half of the year compared with the same period last year.

But the DOS said households in the lowest 20 per cent income group experienced a marginally higher increase in consumer inflation, or CPI, at 7.4 per cent. CPIs for the middle 60 per cent and highest 20 per cent income groups rose by 6.9 per cent each.

DOS said the higher inflation rate experienced by the lowest 20% income group was due primarily to dearer food as well as higher accommodation costs and electricity tariffs.

These items also have relatively larger weights in the CPI for the lowest 20 per cent compared to other income groups.

Food, housing and transport and communications were the three main groups contributing to the significant increase in CPI for all income groups in the first half of 2008.

Within the housing group, the main increases came from higher accommodation costs and electricity tariffs while dearer petrol was mainly responsible for the rise in the transport and communications costs.

The increase also partly reflected the 2 percentage point hike in the Goods and Services Tax since July 2007.

But the worst may now be over. Analysts said there are now signs that inflation in Singapore has peaked.

Irvin Seah, an economist with DBS Bank, said: “The good signs that we’ve been seeing in the market are that we’ve seen oil prices coming off quite a fair bit.

“And furthermore, the Malaysian government has announced just a couple of days ago, a cut in fuel prices. That should bring some relief as far as price of food items, which we import from Malaysia, is concerned.

“We have some transport measures which came into play in July and hence that will keep transport CPI especially, at an elevated level for the rest of the year and right through next year as well.”

Going forward, economists said inflation in Singapore is likely to moderate in the second half of this year. This will bring inflation for the year in line with the government’s forecast of between 6 and 7 per cent.

Philip McNicholas, economist at IDEAglobal, said: “My expectation (of inflation) for the full year would be somewhere around 6.5 per cent.” - CNA/yb/ir

Source : Channel NewsAsia - 25 Aug 2008