The Consumer Price Index (CPI) rose 6.7% in March 2008 when compared with the same month in 2007 (year-on-year comparison). This continued the high increases since January 2008 at 6.6% and February 2008 at 6.5%. Hence for the first quarter of 2008, CPI was up 6.6% compared to the same quarter in 2007.
The government is still sticking to CPI to be in the range of 4.5% to 5.5% for full-year 2008. The expectation is that the inflationary pressures may ease in the second half of 2008. In addition, the 2% increase in GST since July 2007 will no longer impact the CPI from July 2008 onwards.
Singaporeans have not seen a 6.7% increase in March CPI since March 1982, which is a 26-year record high. (Source: The Straits Times, 24 April 2008)
We are used to low inflation rates for a long time until July 2007 (CPI was an increase of 2.6% then) when the CPI started to move upwards to where we are today.
What caused the March CPI to increase? They are due mainly to:
1. Food prices rose 7.6% (Food comprise 23% of CPI)
2. Higher petrol, car prices, and taxi fares drove Transport & Communication costs up 7.9% (Transport & Communication comprise 22% of CPI)
3. Housing rose 8.1% (Housing comprise 21% of CPI)
4. Healthcare costs rose 7.3%
(Source: The Straits Times, 24 Apr; Department of Statistics, Singapore)
It should come as no surprise, since higher oil prices and global food price hikes translate to higher inflation. Oil has crossed US$115 per barrel in recent days and food items such as rice, wheat, milk products, vegetables, poultry and seafood have gone up due to worldwide supply crunch and higher demand for these items by nations.
Written on 4/24/2008 4:29 PM
Copyright © 2008, the author known as LKT in Singapore.
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