Monday, July 23, 2012

Singapore Inflation Edges Higher to 5.3% in June

SINGAPORE: Inflation in Singapore continues to climb with housing and transport costs topping the increase. 

The consumer price index (CPI), a key gauge of inflation, rose to 5.3 per cent year-on-year in June, according to a statement from the Department of Statistics.

However, economists said if inflation stays stubbornly high, the MAS may allow further appreciation of the Singapore dollar to tackle increased costs. 

Economists are concerned over food supply disruption from agricultural economies and whether the US Federal Reserve may implement a third round of quantitative easing.

Aurobindo Ghosh, program director, SKBI, Singapore Management University, said: "Increase of liquidity is not necessarily a way of generating more growth if the banks are not lending to each other more enough then it is very difficult even with more liquidity to keep control on inflation because inflation is related to more liquidity in the market as well."

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