Check-out counters at a supermarket in Singapore
SINGAPORE: Singapore's consumer price index (CPI) rose by 5.4 per cent on-year in July, just shy of the two-year high of 5.5 per cent in January.
This shattered market forecasts of a moderate 5 per cent rise, as well as June's 5.2 per cent increase.
The rise in July was due largely to higher costs of accommodation, private road transport and food.
According to the Department of Statistics on Tuesday, the higher accommodation cost was largely contributed by higher imputed rentals of owner-occupied accommodation, while the higher transport cost was due to the sharp increase in Certificate of Entitlement (COE) premiums compared to a year ago.
Core inflation, which excludes accommodation and private road transport costs, rose 2.2 per cent year-on-year.
On a yearly basis, housing costs rose by 9.5 per cent while the cost of transport increased by 11.5 per cent.
Analysts said the Monetary Authority of Singapore (MAS) is likely to keep its monetary stance of allowing the Singdollar to appreciate. But this could be at a more gradual pace, considering that the strengthening currency is already hurting Singapore's export competitiveness.
Jonathan Cavenagh, foreign exchange strategist at Westpac Banking Corporation, said: "....against the backdrop of very weak conditions potentially in both the US and the European economies, which are quite important export markets for Singapore, that potentially creates the risk of weaker-than-expected economic growth and so that's a delicate balancing for policymakers."
Analysts also said the MAS is likely to ease up on the Singdollar appreciation as it is not too effective in easing headline inflation, which is mostly domestically driven.
Jonathan Cavenagh said: "Given that some of the inflationary pressures are being generated from the perspective of domestic demand as opposed to external demand, we can certainly see scope for administrative controls."
Mr Cavenagh cited housing subsidies as an example of administrative control.
Analysts said the slowing global economy could lessen inflationary pressures.
Chow Penn Nee, UOB economist, said: "Slowing economic growth could also ease inflationary pressures as the most recent COE prices have dipped, and lower commodity prices bring down costs of food, fuel and other associated costs."
The MAS recently lifted its forecast for annual inflation to between 4 and 5 percent.
Via: http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1148618/1/.html
Reference: http://bizdaily.com.sg/newsite/singapore-july-cpi-up-5-4-per-cent-beats-market-estimates/
No comments:
Post a Comment