Sunday May 25, 2008

Singapore inflation rate hits new 26-year high of 7.5% in Apr 2008

This article belongs to the Singapore inflation watch story arc.

channelnewsasia.com :

Singapore's annual [CPI] inflation rate rose to a new 26-year high of 7.5% in April [2008] as food, housing and transportation costs soared and is now a risk to the economy, the government said on Friday [23 May 2008]. Food prices alone rose 8.5%, transportation and communication were 7.0% higher and housing costs became 11.8% more expensive, the statistics department said. It said April's inflation rate is the highest since February 1982, when it stood at 9.0%. Oil prices surged to unprecedented record peaks of more than US$135 a barrel on Thursday [22 May 2008] and analysts said it could still go higher.

Ravi Menon, second permanent secretary at the trade ministry, said inflation is emerging as a bigger risk to the economy : "We expect food and oil prices to remain elevated over the near term and filter through into domestic prices." The trade ministry said inflation should remain around the current levels for the next two months and ease in the second half of the year. Analysts said the central bank could further strengthen the Singapore dollar in a bid to tame inflation.

- And of course, the 7.5% inflation rate is just the official CPI figure. Actual street prices are in many cases running much higher than that. Official "second half easing" talk notwithstanding, my opinion is that eventually we will hit the double-digit inflation figures of the 1970's and there is some chance that we could go beyond that.

And if (or might that be "when") we go beyond double-digit inflation and into triple-digit inflation, we'll be going into hyperinflationary territory. Most people see global hyperinflation as a rather remote possibility at this moment, but remember that most people also saw triple-digit world crude oil prices as a rather remote possibility just a couple of years ago. Inflation is going exponential and we ain't seen nothing yet.

See also :

1. Singapore CPI inflation rate hits 6.7% for Mar 2008, fastest in 26 years
2. Singapore CPI inflation hits 6.6% in Jan 2008 - a new 25-year record high
3. Hyper-inflation : early warning signs
4. Singapore hyperinflation warning signs #2 : Cooking oil price up 75%

Updated :

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

(2008-05-25 19:20:56 SGT) [Biz] Permalink

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