Monday April 28, 2008

Singapore CPI inflation rate hits 6.7% for Mar 2008, fastest in 26 years

This article belongs to the Singapore inflation watch story arc.

Singapore's inflation accelerated in March [2008] to the fastest pace in 26 years, adding support to the central bank's decision this month to allow the currency to strengthen further. The consumer price index jumped 6.7% from a year earlier, after gaining 6.5% in February, the Department of Statistics said today [23 Apr 2008].

The Monetary Authority of Singapore in its twice-yearly review of the exchange rate on April 10 unexpectedly targeted a stronger trading range for the currency. The appreciation of the Singapore dollar, which has risen to an all-time high versus the U.S. currency, is helping reduce import costs as food and energy prices climb. Singapore's government is distributing cash and food vouchers to its citizens as part of fiscal measures to boost the economy and ease the burden of rising prices.

- I'm worried that, as far as inflation goes, "we ain't seen nothin' yet". Crude oil prices continue to test new record highs ($119.93 was hit this morning), and food prices continue to be driven upward by increasing agricultural commodity prices, particularly rice which has been setting new records.

I am skeptical about using Singapore dollar appreciation as a tool to combat inflation due to the limited range at which it can be allowed to appreciate without killing off our exporting companies, and the food vouchers part is also worrying because it has never been the custom for the Singapore government to move towards any form of welfare system. And the fact that they are doing so is really driving home the depth of the crisis that we are now facing.

See also :

1. Singapore CPI inflation hits 6.6% in Jan 2008 - a new 25-year record high
2. Singapore : Inflation rate could push past 6% in Q1 2008
3. Hyper-inflation : early warning signs
4. Singapore economy stuck in mud : inflation rising, M3 falling, GDP crashing - the stagflation formula

Updated :

1. Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%
2. Singapore inflation rate hits new 26-year high of 7.5% in Apr 2008

(2008-04-28 19:33:26 SGT) [Biz] Permalink

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