Consumer price inflation is likely to rise in view of the gradual improvement of the economy, according to the Monetary Authority of Singapore’s (MAS) October Macroeconomic Review.
Consumer prices will be affected by the increasing domestic business cost, therefore increasing the consumer price index (CPI) for all items inflation in the next few quarters.
On account of the improving outlook for the global economy, external price pressures are likely to stay subdued in 2014. Commodity prices are also expected to decline due to favourable supply conditions.
Domestic food inflation is expected to rise in 2014, from 2 percent to 3 percent, as food vendors pass on increases in labour and rental costs to consumers.
Core inflation will rise to 2.5 percent in the second and third quarter of 2014, but is expected to ease towards the end of the year.
Overall Gross Domestic Product (GDP) growth for Singapore is unlikely to change significantly, from the current 2.5 percent to 3.5 percent, in 2014.
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