Thursday June 26, 2008

Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%

This article belongs to the Singapore inflation watch story arc.

bloomberg.com :

Singapore's consumer prices rose at a slower-than-expected pace last month [May 2008], reducing the need for further currency gains to rein in inflation. The consumer price index [CPI] jumped 7.5% from a year earlier, matching April's 26-year high record, the Department of Statistics said [23 Jun 2008]. The Monetary Authority of Singapore [MAS] had forecast a 5-6% inflation rate for 2008. The central bank has allowed its currency to strengthen against the US dollar, saying the exchange rate remains its most effective tool to fight inflation.

- The Singapore inflation rate is reportedly stabilizing and analysts are already predicting that it will come down in the second half of 2008. Singapore M3 money supply figures also appear to be stabilizing around the 12-13% level in the past half year, down from a high of 23.62% in 2007. But the money supply growth rate is only half the story - the other half is its relationship to the growth of available goods and services in the economy. For the inflation rate to be stable, economic growth has to at least keep up with money supply growth. With a looming global economic slowdown and imminent worldwide recession, the economic growth factor is the big wildcard.

Gold and crude oil prices may have paused from breaking new all-time record highs for the time being, but the inflationary storm is far from over as yet. We may only be passing through the eye of the hurricane here - just when people start to get lulled into complacency, the winds of inflation could well pick up with renewed force - perhaps even stronger than ever. We need to remain vigilant against inflation. This is no time to let down your guard yet.

See also :

1. Singapore inflation rate hits new 26-year high of 7.5% in Apr 2008
2. Singapore CPI inflation rate hits 6.7% for Mar 2008, fastest in 26 years
3. Singapore CPI inflation hits 6.6% in Jan 2008 - a new 25-year record high

(2008-06-26 00:17:04 SGT) [Biz] Permalink

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