Inflation for May 2008 as measured by Consumer Price Index (CPI) increased 7.5 per cent over May 2007. (April 2008 saw similar 7.5% increase year-on-year.) For the first 5 months of 2008, the CPI was 7.0% higher compared with the same period of last year. However, the good news was that CPI increase has slowed down from April 2008 to May 2008, with only 0.2% increase.
“The CPI increase in May 2008 was due primarily to higher costs of food, transport & communication and housing. Food prices advanced by 9% as a result of dearer cooked food, rice & other cereals, milk products, fresh vegetables, poultry, seafood and cooking oil. The 6% rise in the costs of transport & communication was attributed mainly to dearer petrol, as well as higher taxi fares and car prices. Housing cost increased by 12.4% on account of higher accommodation costs and electricity tariff.” (Source: Department of Statistics, Singapore Press Release, 23 June 2008)
One would hope that the slowdown in CPI increase from April 2008 to May 2008 can persist for another month in June. Come July, the 2% increase in GST (which began in July 2007) will no longer impact the CPI. Any increase in CPI then will purely be caused by actual price increases of goods and services. If prices of oil and food stabilise without runaway prices, then there is hope that inflation for the whole year could be between 5% to 6% as projected by the government.
Written on 6/23/2008 9:06 PM
Copyright © 2008, the author known as LKT in Singapore.
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