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Singapore’s consumer prices climbed in January as transportation and healthcare costs rose amid an economic recovery that has spurred demand for goods and services.
The consumer price index rose 0.2 percent from a year earlier, the Department of Statistics said in a statement in Singapore today. The index this month reflects a change in the base year to 2009 from 2004. Prices climbed 0.7 percent from December, without adjusting for seasonal factors.
Central banks around the world are starting to tighten monetary policy as economic recovery takes hold. Inflation accelerated in Thailand and Indonesia last month, and reports from Hong Kong and Malaysia this week are forecast to show consumer prices gained in the same period.
“A similar picture will emerge in most Asian economies: inflation is building up, and this will lead most central banks to begin normalizing monetary policy in the second quarter,” said Sebastien Barbe, a Hong Kong-based strategist at Calyon, the investment banking unit of France’s Credit Agricole SA. “The pace of rate normalization will be gradual.”
Singapore’s inflation rate will probably average between 2 percent and 3 percent this year, from a previous estimate of between 2.5 percent and 3.5 percent, the government said last week. The revision is a result of a rebasing of the consumer price index, it said.
The Monetary Authority of Singapore, which uses its currency rather than interest rates to manage price gains, maintained a no-appreciation stance in its exchange-rate policy in October.
Economists are still mixed about the timing of the next move by Singapore’s central bank, which reviews its currency stance twice a year, in April and October. Singapore’s monetary policy stance remains appropriate, the central bank said Feb. 19.
Housing prices, the biggest component of the consumer price index, fell 2.4 percent in January from a year earlier. Food prices rose 0.1 percent, while transport and communications costs increased 7.1 percent in the same period.
Housing prices rose 2.6 percent last month from December as Singapore Power Ltd., the island’s main electricity provider, increased tariffs for the January-to-March quarter by an average 5.4 percent because of higher oil costs.