Singapore’s inflation rate held above five percent for a fourth month as housing and transportation costs surged, the Department of Statistics said in a statement today, with inflation at 5.7 percent in August, according to previously reported data.
Singapore’s central bank, which uses the island’s dollar to manage prices, said this month it will slow gains in its currency, joining other Asian policy makers in trying to juggle inflation pressures with protecting growth amid a faltering global recovery. The trade ministry cut its growth forecast for 2011 on Oct. 14 and the Monetary Authority of Singapore said the expansion may slow further next year.
“Wage inflation pressures from the still tight labor market” could keep services costs and inflation elevated, Kit Wei Zheng, a Singapore-based economist at Citigroup Inc., said before the report. “Accommodation costs, which MAS guidance had earlier flagged as a significant inflation driver, will also be another source of inflation.”
The Singapore dollar fell more than 7 percent against its U.S. counterpart in September, along with most other Asian currencies, as a deepening European debt crisis prompted investors to shun emerging-market assets. It had reached unprecedented levels since the central bank said in April it would allow further appreciation to tame price gains, trading below S$1.20 in July.
Inflation will average about 5 percent this year and 2.5 percent to 3.5 percent in 2012, the central bank said this month.
Prices fell 0.2 percent last month from August, without adjusting for seasonal factors, today’s report showed.