Singapore raises '08 inflation forecast to 6-7 pc
Singapore raised its inflation forecast to between 6 pc and 7 pc for this year after soaring global energy and food prices exceeded central bank expectations.
By Agencies |
SINGAPORE: Singapore raised its inflation forecast Thursday to between 6 per cent and 7 per cent for this year after soaring global energy and food prices exceeded central bank expectations.
The bank, known as the Monetary Authority of Singapore, had previously forecast an annual rate of 5 per cent and 6 per cent, but a surge in commodities prices over the past year helped quicken inflation in June to 7.5 per cent, a 26-year high.
"These external developments higher oil prices, continued high prices of food and inflationary pressures in our trading partners have affected Singapore because of our openness and heavy dependence on imports," Heng Swee Keat, the central bank's managing director, said at a news conference.
Many Asian countries have seen inflation rates jump to their highest levels in decades as policymakers struggle to contain price increases without damaging economic growth.
Heng said he expects central bankers throughout the region will raise interest rates to help ease inflation pressures.
The bank kept its economic growth forecast for 2008 unchanged at between 4 per cent and 6 per cent. The forecast is based on a model assuming the US economy will grow about 1.5 per cent this year, Heng said.
Singapore's gross domestic product expanded 4.3 per cent in the first half, it grew 7.7 per cent in 2007.
Heng said weaker commodity prices and slower economic growth, the absorption of a sales tax increase last July and the strengthening of the Singapore dollar will help pull back inflation during the second half of the year.
The bank, known as the Monetary Authority of Singapore, had previously forecast an annual rate of 5 per cent and 6 per cent, but a surge in commodities prices over the past year helped quicken inflation in June to 7.5 per cent, a 26-year high.
"These external developments higher oil prices, continued high prices of food and inflationary pressures in our trading partners have affected Singapore because of our openness and heavy dependence on imports," Heng Swee Keat, the central bank's managing director, said at a news conference.
Many Asian countries have seen inflation rates jump to their highest levels in decades as policymakers struggle to contain price increases without damaging economic growth.
Heng said he expects central bankers throughout the region will raise interest rates to help ease inflation pressures.
The bank kept its economic growth forecast for 2008 unchanged at between 4 per cent and 6 per cent. The forecast is based on a model assuming the US economy will grow about 1.5 per cent this year, Heng said.
ADVERTISEMENT
Singapore's gross domestic product expanded 4.3 per cent in the first half, it grew 7.7 per cent in 2007.
Heng said weaker commodity prices and slower economic growth, the absorption of a sales tax increase last July and the strengthening of the Singapore dollar will help pull back inflation during the second half of the year.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
