Singapore Inflation rises 7.5% on—year in May on higher food, transport costs

As reported in Channel News Asia.


Singapore's annual inflation rate stayed at 7.5 percent in May, boosted by rising food, transport and housing costs, the government said.

The monthly consumer price index (CPI) was the same as the 7.5 percent recorded for April -- which was a 26-year high -- but lower than the 7.7 percent forecast by economists polled by Dow Jones Newswires.

Food prices rose by 9.0 percent year-on-year in May, more than the 8.5 percent in April, while housing costs jumped by 12.4 percent, against April's 11.8 percent, data from the statistics department showed.

Transport and communications costs rose by 6.0 percent last month, slower than the 7.0 percent rise for April, figures showed.

From April to May, the CPI rose by 0.2 percent, the statistics department said.

In the first five months of the year, the CPI was 7.0 percent higher compared with the same period last year, it said.

Singapore, Southeast Asia's most advanced economy, imports most of its needs because it lacks the natural resources and agricultural base of its bigger neighbours.

The trade ministry is forecasting inflation of five to six percent for the year.

Governments around the region are grappling with rising prices, particularly as the global cost of oil hovers near record levels.

(source : http://www.channelnewsasia.com/stories/singaporelocalnews/view/355799/1/.html)

With inflation at all time high, and uncertainty in the global ecnomy and high oil prices, it escalate the fear of a massive onslaugh of global slowdown.

Inflation reduced spending power as people are buying lesser with the same amount of goods. This will in turn cause people to cut back on spending. With that, it may lead to further slowdown in the economy. Should major economies goes into recession, this recession are likely going to be a rather nasty one.