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PR Newswire
23-12-2010, 03:57 PM
DJ UPDATE: Singapore Inflation Fastest In Almost 2 Years
By Gaurav Raghuvanshi
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Consumer prices in Singapore rose at their fastest pace since January 2009, underscoring inflationary pressures being felt across the region.
The consumer price index was up 3.8% on year in November, after logging a 3.5% increase in October, as prices of goods and services rose across the board. The pace matched the median estimate of seven analysts in a Dow Jones Newswires poll.
From a month earlier, the index rose 0.4% in seasonally adjusted terms, faster than a 0.1% increase in October. Economists had forecast an increase of 0.4%.
"While the usual suspects continued to drive inflation in November--including transport, housing and food costs--it should be noted that all major segments within the CPI basket are seeing price increases," Standard Chartered Bank economist Alvin Liew said in a note after the data were released.
Inflation is likely to be Singapore's key challenge in 2011, Liew said.
Still, most economists don't expect the Monetary Authority of Singapore to tighten monetary policy before its next meeting in April.
"Like other central banks in the region, the MAS is likely to be watching inflation over the next few months to see if they have to do any more tightening. It's not a crisis and the MAS will wait till its next review in April and its likely action then is still a pretty close call," said David Cohen, head of Asian economic forecasting at Action Economics.
Thursday's inflation data were in line with the central bank's expectations. The MAS in October said it expects inflation to near 4% by the end of 2010, and to remain high in the first few months of 2011 before easing.
Major Asian central banks made 21 tightening moves by either raising interest rates or shifting currency regimes in 2010 as inflationary pressures increased with rebounding growth, according to a compilation by DBS Bank.
"Interest rates are too low given current inflation rates and growth will continue to run fast until this is rectified. We expect to see another 24 rate hikes in the Asia-10 (Asia ex-Japan) by June," David Carbon, DBS Bank's managing director for economic and currency research, said on Dec. 9.
By Gaurav Raghuvanshi
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Consumer prices in Singapore rose at their fastest pace since January 2009, underscoring inflationary pressures being felt across the region.
The consumer price index was up 3.8% on year in November, after logging a 3.5% increase in October, as prices of goods and services rose across the board. The pace matched the median estimate of seven analysts in a Dow Jones Newswires poll.
From a month earlier, the index rose 0.4% in seasonally adjusted terms, faster than a 0.1% increase in October. Economists had forecast an increase of 0.4%.
"While the usual suspects continued to drive inflation in November--including transport, housing and food costs--it should be noted that all major segments within the CPI basket are seeing price increases," Standard Chartered Bank economist Alvin Liew said in a note after the data were released.
Inflation is likely to be Singapore's key challenge in 2011, Liew said.
Still, most economists don't expect the Monetary Authority of Singapore to tighten monetary policy before its next meeting in April.
"Like other central banks in the region, the MAS is likely to be watching inflation over the next few months to see if they have to do any more tightening. It's not a crisis and the MAS will wait till its next review in April and its likely action then is still a pretty close call," said David Cohen, head of Asian economic forecasting at Action Economics.
Thursday's inflation data were in line with the central bank's expectations. The MAS in October said it expects inflation to near 4% by the end of 2010, and to remain high in the first few months of 2011 before easing.
Major Asian central banks made 21 tightening moves by either raising interest rates or shifting currency regimes in 2010 as inflationary pressures increased with rebounding growth, according to a compilation by DBS Bank.
"Interest rates are too low given current inflation rates and growth will continue to run fast until this is rectified. We expect to see another 24 rate hikes in the Asia-10 (Asia ex-Japan) by June," David Carbon, DBS Bank's managing director for economic and currency research, said on Dec. 9.
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