Tuesday, October 26, 2010

- Inflation at highest level

INFLATION in Singapore rose to its highest level in 20 months last month as housing, transport and food continued to become more expensive.

Last month's consumer price index (CPI) rose 3.7 per cent from the same month a year earlier. It follows a move earlier this month by the Monetary Authority of Singapore (MAS) to tighten monetary conditions, owing to its concerns over rising costs.

The CPI came in slightly above a 3.6 per cent rise estimated by 13 economists in a survey by Bloomberg News. Inflation rose 0.2 per cent month-on-month from August, after adjusting for seasonal factors, according to the Department of Statistics on Monday.

DBS economist Irvin Seah said: 'With overall inflation grinding steadily northward, risks are certainly tilting towards inflation rather than growth.'

Transport and housing were the main factors as higher car prices contributed a 9.1 per cent rise in transportation costs from a year ago, while housing costs rose 4.7 per cent. There were signs that car prices are easing, as they fell 0.2 per cent from August.

Food is a growing concern with prices of vegetables, fresh seafood, rice and cereal and dairy products contributing to a 1.7 per cent rise from 12 months ago.