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Singapore’s inflation accelerated in July as higher oil costs pushed up electricity tariffs and government quotas on vehicle licenses boosted car prices.
The consumer price index climbed 3.1 percent from a year earlier, Singapore’s Department of Statistics said in a statement today. That was more than the 3 percent median estimate of nine economists surveyed by Bloomberg News. Prices rose 1.3 percent from June, without adjusting for seasonal factors, the data showed.
Singapore’s record first-half expansion has boosted hiring and consumer spending and prompted the government to raise growth forecasts three times this year. The central bank said last month economic activity will probably remain at “high levels” for the rest of the year, adding pressure on business costs and spurring inflation.
“Given probable wage inflation pressures from the second half of 2010 to 2011, we expect inflation to continue its upward trajectory,” Kit Wei Zheng, a Singapore-based economist at Citigroup Inc., said before the report.
The Singapore dollar has gained 3.4 percent against its U.S. counterpart this year.
The Monetary Authority of Singapore uses the currency instead of interest rates to contain inflation, which it forecasts will average between 2.5 percent and 3.5 percent this year. The central bank’s currency policy stance remains “appropriate,” Deputy Managing Director Ong Chong Tee said earlier this month.
Housing prices, the biggest component of the consumer price index, climbed 2.7 percent from a year earlier, and transport costs increased 10.7 percent. Food prices rose 1.5 percent.
Singapore Power Ltd., the island’s main electricity provider, increased tariffs for the July-to-September quarter by an average 2.4 percent because of higher oil costs.