Singapore’s core inflation rose for a seventh straight month at the fastest rate in almost a decade amid expectations that the Monetary Authority of Singapore will act on inflation in April by tightening policy.
Core consumer price index excluding private transport and accommodation costs rose 2.4% in January, the highest since September 2012.
Food and energy prices drove the decade high inflation.
“The story about inflation is that risks remain on the upside,” said Irvin Seah, a Singapore-based senior economist for DBS Group Holdings Ltd, as reported by Bloomberg.
The rise in consumer price increase also incentivized officials to increase Goods and Services Tax over two years.
Finance Minister Lawrence Wong, speaking earlier this week on CNBC, said the move is aimed at addressing concerns about levies going up “at a time of rising prices.”
“While ongoing external supply constraints should ease in the second half of 2022, leading to some moderation in imported inflation, there remain upside risks to inflation from pandemic-related and geopolitical shocks that could further disrupt global supply chains,” the MTI and MAS said in the statement, adding that the domestic labor market is expected to tighten.