It is attributed to greater domestic demand for goods and services as the economy recovers.
A general view shows the skyline of the financial business district in Singapore on October 20. (Photo: AFP/VNA)
On the flip side, prices are also being driven up by rising import costs amid global transportation bottlenecks.
Overall inflation edged up to 3.8 percent in November, from October’s more than the eight-year high of 3.2 percent. It outdid the 3.4 percent forecast by analysts polled by Bloomberg.
Core inflation, excluding rents and private trucking costs, rose to 1.6 percent, from 1.5 percent in October, amid rising service costs and it is expected to grow in the coming months.
Private transport inflation rose to 17.9 percent in November, from 14.3 percent of the previous month due to an increase in car prices. Electricity and gas costs also saw a remarkable increase – at 10 percent in November, compared with October’s 7.8 percent as some retailers exited the market.
Services inflation rose to 1.9 percent from 1.6 percent in October, due to a faster pace of increase in airfares as border restrictions eased. Home rents rose, leading to accommodation inflation of 2.7 percent, compared with October’s 2.5 percent. Food inflation also climbed to 1.9 percent in November, from 1.7 percent the previous month.
MAS and MTI raised their overall inflation forecast for this year to 2.3 percent, up 2 percent compared to the previous forecast, given the sharp rise in private transport costs in recent months. They kept their overall inflation estimate for 2022 unchanged at 1.5- 2.5 percent. The core inflation is projected to be at 0.9 percent for 2021 and increase 1-2 percent further in 2022.
The MAS and MTI said on December 23 that wages have increased and are anticipated to continue to rise at a steady pace as the labour market dissipates, thereby, driving up both costs and prices./.