Singapore inflation, as measured by the consumer price index (CPI), increased by 5.2 per cent for the whole of 2011 compared with 2010.
The annual inflation rates for each year from 2007 to last year are listed below:
Towards the end of 2007, the US sub-prime mortgage problem began and it became a full-blown global financial crisis in 2008/2009. Singapore was also affected by the global financial crisis because she is an open-economy with export as one main contributor to her Gross Domestic Product (GDP). The annual GDP growth rates for each year are listed below:
2009: -0.8% (recession)
2011: 4.8% (est)
For year 2007, 2009 and 2010, CPI increased below 3 percentage points. At this level, inflation posed no significant hardships to residents where annual salary increments will be able to soften the impact of price inflation of goods and services.
The exception years were 2008 when CPI rose 6.6 percent and 2011 when it rose 5.2 per cent. Though GDP growth rate was low (1.5%) in 2008, CPI was high at 6.6 per cent because of higher food prices, higher accommodation costs and electricity tariff, and higher costs of transport on account of dearer petrol and higher taxi fares.
For last year (2011), inflation of 5.2 per cent was due mainly to higher costs in accommodation, private road transport and food, which was quite similar to 2008.
Forecast for 2012
In a joint statement by Monetary Authority of Singapore and Ministry of Trade & Industry, the government expects CPI to ease and come down to between 2.5 – 3.5 per cent for 2012 due to forecast slowdown in economic gowth for this year.
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