Monday, August 25, 2008

Inflation is up 6.5%

These are the Singapore inflation rates for 2008:
January: 6.6%
February: 6.5%
March: 6.7%
April: 7.5%
May: 7.5%
June: 7.5%
July: 6.5%

Food and Housing is leading the charge, rising by 8.5% and 12.5% respectively year on year. Judging that the numbers have only dropped 1% compared to June 2008, that means July inflation rate has been pretty high. I actually expected about 6.2% or 6.3%.

On a half year basis, the average increase is a whopping 7.1% increase. This affects the lower income the most because the main increase in inflation has been led by Food, Housing and Transport and Communication, all of which are essential goods and services.

August should see a lower inflation reading though due to the commodities fall recently, but seeing that it's coming from such a high base, inflation rate for August might still end up above 6%. From what I can see, I cannot see inflation below 6% this year. More likely it will be above 6%.

Will the Singapore government be wrong in their forecast? If they're keeping their 5%-6% forecast, most likely yes.

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