We have inflation problem in US, China and Singapore. I am sure some other countries are also experiencing this problem. For China, the government is stepping in to curb price rises of basic necessities like food and energy. According to a report in Forbes.com, China's CPI rose at an annualized rate of 6.9% in November 2007, the fastest pace in 11 years. In Singapore, we see inflationary pressure in basic necessities such as food, transport and housing. This evening, STI closed at 3,311.07 with another 33.46 points plunge. The following is an excerpt from Business Times (10 Jan 2008):
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Inflation rate could push past 6% in Q1
Upward revision of value of public housing cited
By CHEW XIANG
SINGAPORE'S inflation rate could soar past 6 per cent in the current quarter, beating previous estimates, as an upward revision of the value of public housing kicks in this month and food and oil prices continue to climb.
'We were previously looking at 3.9 per cent for this year, but I think it will be much higher,' United Overseas Bank economist Ho Woei Chen said yesterday.
'The revision (of annual values) will be quite significant, and we underestimated the extent of the taxi fare increase, the food price increase, oil price increase.'
The Inland Revenue Authority of Singapore has raised its assessment of values across all flat types by 18-25 per cent from Jan 1. Housing value has a significant weight in the consumer price index (CPI).
'(Inflation for the year) can potentially exceed the Monetary Authority of Singapore's forecast of 3.5 to 4.5 per cent for 2008,' Ms Ho said.
According to her, a lot will depend on the inflation figures for January. Core inflation, which excludes accommodation and private road transport costs, could also come in above the MAS forecast made in October of 1.5 to 2.5 per cent for the year, she reckons.
But 'given some expectation of lower global growth this year I think there could be some self-correcting mechanism later this year', she said.
'We could see oil prices coming in lower this year' which could bring down inflation closer to the end of the year, especially given the high base in November 2007.
The CPI that month surged 4.2 per cent year on year - a 25-year high.
Inflation rate could push past 6% in Q1
Upward revision of value of public housing cited
By CHEW XIANG
SINGAPORE'S inflation rate could soar past 6 per cent in the current quarter, beating previous estimates, as an upward revision of the value of public housing kicks in this month and food and oil prices continue to climb.
'We were previously looking at 3.9 per cent for this year, but I think it will be much higher,' United Overseas Bank economist Ho Woei Chen said yesterday.
'The revision (of annual values) will be quite significant, and we underestimated the extent of the taxi fare increase, the food price increase, oil price increase.'
The Inland Revenue Authority of Singapore has raised its assessment of values across all flat types by 18-25 per cent from Jan 1. Housing value has a significant weight in the consumer price index (CPI).
'(Inflation for the year) can potentially exceed the Monetary Authority of Singapore's forecast of 3.5 to 4.5 per cent for 2008,' Ms Ho said.
According to her, a lot will depend on the inflation figures for January. Core inflation, which excludes accommodation and private road transport costs, could also come in above the MAS forecast made in October of 1.5 to 2.5 per cent for the year, she reckons.
But 'given some expectation of lower global growth this year I think there could be some self-correcting mechanism later this year', she said.
'We could see oil prices coming in lower this year' which could bring down inflation closer to the end of the year, especially given the high base in November 2007.
The CPI that month surged 4.2 per cent year on year - a 25-year high.
