| |
| |
![]() |
| |
|
| |
|
| |
|
SINGAPORE: Singapore's central bank is reviewing its full-year inflation forecast of five to six per cent for 2008, according to Mr Khor Hoe Ee, an Assistant Managing Director with the Monetary Authority of Singapore (MAS).
He said that on a month-on-month basis, inflation is already showing signs of easing and the MAS expects the trend to continue.
The comment came at the sidelines of the release of the latest Asia Economic Monitor report by the Asian Development Bank.
Economists that Channel NewsAsia spoke to said they expect inflation to taper off by year-end. But overall, inflation rates for the whole year will most likely be higher than forecast.
Rising food and transportation costs have been driving inflation upwards, all at the back of rising oil prices.
Singapore's inflation rate rose to a 26-year high of 7.5 per cent in April and May, and economists said they expect the June figure to hit a new peak.
Song Seng Wun, CEO and Regional Economist, CIMB-GK Research, said: "Well, I think we agree with the consensus forecast of about an eight per cent increase on a year-on-year basis, about 0.8 per cent month-on-month seasonally-adjusted.
"And we've got several reasons for the spike in prices (in) June. Of course, higher fuel is certainly one of them. Higher food prices are also another reason for the higher CPI."
Most economists are expecting inflation to start easing in the second half of the year. But given the increases in ERP charges and transport costs, they said that any adjustment to the full-year figure, if any, is likely to be upwards.
Mr Song continued: "If there were to be any revision, I would say it will be revised upwards rather than downwards.
"For the CPI, which is currently year-to-date around 7 per cent, and with the June figures slightly to exceed seven per cent, we will need inflation to drop down to an average of three per cent for the second half of the year for the CPI to average at the lower end of that government range of five per cent."
Economists expect inflation rates in December to come down, between four and five per cent, and all eyes are on crude oil prices, which have fallen in recent weeks.
Kit Wei Zheng, Asia Pacific Economic and Market Analyst, Citicorp Investment Bank, said: "Although crude oil prices have fallen in recent weeks, it is not a forgone conclusion that this will (be) sustained.
Now obviously a further fall in crude oil price would be helpful, as it may prompt a further downgrade in the inflation forecast. But I think it is too early to make a firm call on that at this point."
The inflation figures for June will be released on Wednesday, and on Thursday, the MAS is due to release its annual report, where its assessment of the inflation picture in Singapore is likely to be a key focus. - CNA/vm
|
